OTHER APPROPRIATED ACCOUNTS Health Maintenance Organization Loan and Loan Guarantee Fund Appropriation Language For carrying out subsections (d) and (e) of section 1308 of the Public Health Service Act, any amounts received by the Secretary in connection with loans and loan guarantees under title XIII of the Public Health Service Act, to be available without fiscal year limitation for the payment of outstanding obligations. During fiscal year 2004, no commitments for direct loans or loan guarantees shall be made. OTHER APPROPRIATED ACCOUNTS GENERAL STATEMENT The Health Maintenance Organization (HMO) Loan and Loan Guarantee Fund served as a mechanism to provide working capital to HMOs in their initial operating periods when financial deficits were expected. During the 1970's, direct loans were made to HMOs from the Fund. These loans were then sold, with guarantees, to the Federal Financing Bank (FFB). The Fund also guaranteed the repayment of loans made by private lenders to HMOs. Because the Health Care Financing Administration (HCFA), now known as the Centers for Medicare & Medicaid Services (CMS), was becoming increasingly responsible for coordinated care, the Public Health Service's HMO program was transferred to HCFA in 1985. Included in this transfer was the HMO Loan and Loan Guarantee Fund. The HMO Loan and Loan Guarantee Fund is now dormant. The last loan commitments were made in 1983. In its period of active operation, the fund operated as a revolving fund. Direct loans to HMOs were sold, with a guarantee, to the FFB. The FFB purchase proceeds were then used as capital for additional direct loans. In the past, CMS collected principal and interest payments from HMO borrowers, and in turn paid the FFB. When loans were prepaid, CMS rarely collected a prepayment penalty because most of the loan agrenents did not have a prepayment penalty clause. However, when CMS repaid the loan to the FFB, a prepayment penalty was incurred, and an obligation was created. In FY 1995, the Congress appropriated $15 million to the HMO Loan and Loan Guarantee Fund so that repayments could be made to the FFB. It is no longer necessary, however, to make repayments because the FFB has been paid in full for the loans. Currently, the unobligated balance in the Fund is $10.5 million. It is anticipated that this balance will be withdrawn at the end of FY 2004 and the account will expire. In November 2001, the Centers for Medicare & Medicaid Services (CMS), in conjunction with the Department of Health and Human Services (DHHS), developed a 2-year Action Plan designed to support the objectives outlined in The President's Management Agenda. This inaugural Action Plan covered the period October 1, 2001 through September 30, 2003, and focused on key human capital management areas such as consolidating administrative functions, organizational de-layering and restructuring, competitive sourcing, FTE reduction, hiring restrictions, and recruitment and hiring. To date, CMS and DHHS have met with considerable success in using the Action Plan as the foundation for attaining many of the objectives outlined in The President's Management Agenda. For example, in FY 2002, CMS identified 16 organizations that exceeded the maximum target level of four management layers and completed delayering efforts in all 16 areas. In the area of consolidation, all CMS administrative functions (e.g., budget/financial management, human resource management, public affairs, and legislative affairs) were either consolidated or determined to be operating at a necessary level of separation due to legitimate business considerations. Further, CMS has worked closely with DHHS to consolidate its human resources management, public affairs, and legislative affairs functions; we anticipate that each of these consolidation efforts will be concluded before the end of FY 2003. In May 2002, CMS's multiple information technology (IT) infrastructure support contracts were merged into a consolidated contract. In FY 2003, CMS will continue to conduct detailed workforce analysis and planning related to its IT work force and organizational structure, and will also focus on the relationship between these issues and the consolidated IT contract. CMS also made significant progress in eliminating a number of administrative positions (e.g., facilities management and human resources) via redeployment and attrition during FY 2002, and we are confident that we will fully meet the FY 2003 target of 93 administrative position reductions through the use of Voluntary Early Retirement Authority (approved for the period October 1, 2002 September 30, 2003), as well as through additional attrition and re-deployments. Because of our successes with the earlier Action Plan, and because we anticipate that many of the key issues facing CMS in FY 2004 will be closely related to issues existing in FY 2002 and FY 2003, the underlying principles and approaches employed in that original plan have served as a blueprint for developing the FY 2004 budget request and strategic human capital management planning initiatives. The information that follows provides an update on FY 2002/2003 restructuring activities and introduces CMS's FY 2004 Strategic Management of Human Capital Action Plan (the next iteration of the |