OTHER ACCOUNTS GENERAL STATEMENT The Health Maintenance Orgar. zation (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 agreements 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. The unobligated balance in the Fund is expected to be $10.3 million at the end of FY 2002. Tetal Obligations, Current Law 2002 2901 Acrasi $2.245.325.000 Exacted $29.263.000 529.251 000 $2,440.799.000 $2,538.330,000 $29.251.006 ($5.523.000) €35.523.000) ($4,164,000) $564,000 50 50 $2,305,365,000 $2,527,949,000 $2,523,334,000 || $2,999.911.800 1/ In FY 2002, CMS has available for obligation the remaining $20.5 million of no-year funds included in CMS s FY 1998, FY 2009 and FY 2001 appropriations for the transition to a single Part A and Part B processing system and managed care redesign acavities. 2/ In FY 2003, both the accrual for retirement and annitant health benefits and the DHS component consolidation have been added to our current law request; Both items are displayed in fiscal years |