42 U.S.C. § 1395i — Federal Hospital Insurance Trust Fund

(a) Creation; deposits; transfers from Treasury. The Treasury must keep a trust fund called the "Federal Hospital Insurance Trust Fund," called the "Trust Fund" in this section. It consists of qualifying gifts and bequests and amounts deposited or appropriated under this part. For the fiscal year ending June 30, 1966, and every later fiscal year, Treasury must appropriate to it amounts equal to 100 percent of: (1) the Internal Revenue Code taxes under sections 3101(b) and 3111(b) on wages reported after December 31, 1965, calculated by the Treasury Secretary^* using the applicable tax rates and wages certified by the Social Security Commissioner from wage records; and (2) the section 1401(b) taxes on self-employment income reported on tax returns, calculated using the applicable rate and income certified by the Social Security Commissioner from self-employment records. Treasury must transfer these amounts from the general fund from time to time, using estimates of taxes paid or deposited, and later adjust transfers for overestimates or underestimates.

(b) Board of Trustees; composition; meetings; duties. The Trust Fund has a Board of Trustees consisting, by virtue of office, of the Social Security Commissioner, Treasury Secretary, Labor Secretary, and Health and Human Services Secretary, plus two public members who cannot both be from the same political party. The President nominates the public members for 4-year terms, subject to Senate confirmation. A public member filling a vacancy serves only the rest of that term. A confirmed public member may continue after the term ends until the successor takes office or the Board first issues a report under paragraph (2), whichever comes first. The Treasury Secretary is the Managing Trustee, and the CMS Administrator^* is Board Secretary. The Board must meet at least once each calendar year. Its duties are: (1) hold the Trust Fund; (2) by April 1 each year, report to Congress on the Fund's operation and status in the prior fiscal year and expected operation and status in the current and next 2 fiscal years; reports beginning in 2005 must include the information specified in section 801(a) of the Medicare Prescription Drug^*, Improvement, and Modernization Act of 2003; (3) immediately report when the Board thinks the Fund is unduly small; and (4) review Fund-management policies and recommend policy or legal changes. The annual report must state^* prior-year assets and disbursements, estimated current-year and next-2-year income and disbursements, and the Fund's actuarial status. CMS's Chief Actuary must give an actuarial opinion certifying that generally accepted actuarial techniques and methods were used and that the assumptions and cost estimates are reasonable. The report must be printed as a House document. A trustee is not a fiduciary and is not personally liable for actions taken as a trustee regarding the Fund.

(c) Investment of Trust Fund by Managing Trustee. The Managing Trustee must invest Fund money not needed for current withdrawals. Investments may be only interest-bearing United States^* obligations or obligations the United States guarantees as to principal and interest. They may be bought at original issue price or at market price. Title 31, chapter 31, is extended to allow public-debt obligations to be issued at par for Trust Fund purchase. Those obligations must have maturities suited to Fund needs and bear interest equal to the average market yield, calculated from quotations at the end of the previous calendar month, on marketable interest-bearing United States public-debt obligations not due or callable for 4 years after that month. If that yield is not a multiple of one-eighth of 1 percent, the rate is the nearest such multiple. The Managing Trustee may buy other qualifying obligations only if the Trustee finds the purchase serves the public interest.

(d) Authority of Managing Trustee to sell obligations. The Managing Trustee may sell Fund obligations, except public-debt obligations issued only to the Fund, at market price. Those special public-debt obligations may be redeemed at par plus accrued interest.

(e) Interest on and proceeds from sale or redemption. Interest on Fund obligations and proceeds from selling or redeeming them are credited to and become part of the Fund.

(f) Payment of estimated taxes. (1) The Managing Trustee must periodically pay from the Fund to Treasury the estimated section 3101(b) taxes subject to refund under section 6413(c) for wages paid after December 31, 1965. The estimate uses Social Security wage records based on reports to Treasury, and the Social Security Commissioner must provide required information. Treasury treats the payments as repayments to the account for refunding internal-revenue collections. (2) Those repayments cannot be spent and must go to Treasury's surplus fund. If an estimate was too high or low, the Managing Trustee must adjust later payments.

(g) Transfers from other Funds. At least once each fiscal year, amounts equal to certified overpayments not already transferred must move to the Trust Fund from the Federal Old-Age and Survivors Insurance Trust Fund and Federal Disability Insurance Trust Fund. The same kind of periodic transfer must come from the Railroad Retirement Account for overpayments certified to the Railroad Retirement Board.

(h) Payments from Trust Fund amounts certified by Secretary. The Managing Trustee must periodically pay from the Fund amounts the HHS Secretary certifies are needed for Part A payments and administrative expenses under section 401(g)(1).

(i) Payment of travel expenses. The Fund may pay actual or fixed travel costs for parties, representatives, and reasonably necessary witnesses traveling within the United States to reconsideration interviews and administrative-law-judge proceedings about determinations under this subchapter. Air travel payment cannot exceed coach fare unless regulations^* require first class because of health or lack of alternatives. Other travel cannot exceed the most economical and fastest suitable transportation under those regulations. A representative's travel to an administrative proceeding cannot exceed the maximum amount allowed for travel starting within the geographic area of the office handling the proceeding.

(j) Loans from other Funds; interest; repayment; report to Congress. (1) Before January 1988, if the Managing Trustee decides borrowing is appropriate to finance Part A benefits, the Trustee may, subject to paragraph (5), borrow appropriate amounts from either the Old-Age and Survivors Insurance Trust Fund or the Disability Insurance Trust Fund and transfer them to the Hospital Insurance Trust Fund. (2) After a loan, on the last day of each month the Hospital Insurance Fund must transfer to the lending Fund all interest accrued that day on the unpaid balance, at the rate the lending Fund would have earned under subsection (c), even if that investment would earn interest at a rate different than the rate earned by investments redeemed by the lending Fund to make the loan. (3)(A) When the Managing Trustee finds that Hospital Insurance assets can repay some or all loans, the Trustee must make appropriate repayments. (B)(i) If at year-end after a loan the Hospital Insurance Trust Fund ratio is over 15 percent, the Trustee must transfer enough to the lending Fund or Funds to reduce the ratio to 15 percent, including transfers to another lending Fund that year, but not more than the unpaid loan balance. (ii) The transfer is due on the last day of the first month of the next year. (iii) The ratio is the year-end Hospital Insurance Fund balance divided by the estimated next-year Fund payments, excluding loan interest and repayments and adjusting Railroad Retirement Account transfers by transfers into the Fund from that Account. (C)(i) All loans, whether before or after January 1, 1983, must be repaid as soon as feasible and no later than December 31, 1989. (ii) From after December 31, 1987, through before January 1, 1990, each month the Trustee must transfer to each lending Fund at least the amount owed at the month's start plus accrued monthly interest, divided by the number of months remaining before January 1990; larger transfers are allowed. (4) The Board must timely report to Congress all transfers under this subsection, including interest. (5)(A) No loan may be made in a month when the OASDI trust fund ratio is below 10 percent. (B) That ratio compares the combined balances of the Old-Age and Survivors Insurance and Disability Insurance Funds, reduced by certain outstanding Hospital Insurance loans, as of the last day of the second preceding month, with 12 times the estimated amount to be paid from those Funds in the month for section 401 purposes, excluding interfund transfers and adjusting Railroad Retirement Account transfers by transfers into those Funds.

(k) Health Care Fraud and Abuse Control Account. (1) The Trust Fund contains an expenditure account called the Health Care Fraud and Abuse Control Account. (2)(A) The Trust Fund receives qualifying gifts and bequests, amounts deposited under specified HIPAA and subchapter XI provisions, and transfers under subparagraph (C). (B) It may accept unconditional money gifts and bequests for the Account or activities financed through it. (C) Under rules similar to Internal Revenue Code section 9601, the Managing Trustee must transfer to the Fund: (i) criminal fines in Federal health-care-offense cases; (ii) civil monetary penalties and assessments in health-care cases, including recoveries under this subchapter, subchapters XI and XIX, and title 31 chapter 38, unless another law provides otherwise; (iii) property forfeited because of a Federal health-care offense; and (iv) False Claims Act penalties and damages otherwise credited to Treasury miscellaneous receipts in cases involving health-care items or services, excluding relator awards, restitution, and amounts otherwise authorized by law. (D) The forfeiture rule does not limit ERISA title I recoveries and forfeitures available for equitable or remedial relief for employee welfare plans and their participants and beneficiaries.

(3)(A)(i) HHS and Justice. From the Trust Fund, amounts certified by the Secretary and Attorney General as necessary for the purposes in subparagraph (C) are appropriated to the Account, available without further appropriation until spent, up to: $104,000,000 for fiscal year 1997; for 1998–2003, the prior year's limit plus 15 percent; for 2004–2006, the 2003 limit; and after 2006, the prior year's limit plus the percentage increase in the CPI-U, all items, United States city average, over the prior year. (ii) Of that amount, HHS Inspector General activities for this subchapter and subchapter XIX must receive: $60–70 million in 1997; $80–90 million in 1998; $90–100 million in 1999; $110–120 million in 2000; $120–130 million in 2001; $140–150 million in 2002; $150–160 million in each of 2003–2006; at least $160 million increased by the CPI-U increase for 2007; and, after 2007, at least the preceding year's required amount increased by that CPI-U increase. (B) FBI. General Treasury funds are appropriated to the Account for transfer to the FBI, available until spent: $47 million (1997), $56 million (1998), $66 million (1999), $76 million (2000), $88 million (2001), $101 million (2002), $114 million in each of 2003–2006, and after 2006 the preceding year's amount increased by the CPI-U increase. (C) These funds pay the costs, including equipment, salaries and benefits, and travel and training, of the administration^* and operation of the health-care fraud-and-abuse-control program under section 1320a–7c(a), including criminal, civil, and administrative prosecutions; investigations; financial and performance audits; inspections and other evaluations; and provider and consumer education about subchapter XI compliance.

(4) Medicare Integrity Program. (A) Each fiscal year, amounts needed for the activities in paragraph (3)(C) and the Medicare Integrity Program under section 1395ddd are appropriated from the Trust Fund to the Account, available until spent, subject to (B)–(D). (B) The fiscal-year amount must be: $430–440 million (1997); $490–500 million (1998); $550–560 million (1999); $620–630 million (2000); $670–680 million (2001); $690–700 million (2002); and $710–720 million for every year after 2002. (C) Add $100 million for 2006, and after 2010 add the prior-year CPI-U percentage increase. (D) Add for Medicare-Medicaid data matching: $12 million in 2006, $24 million in 2007, $36 million in 2008, $48 million in 2009, and $60 million in 2010 and every later year.

(5) Annual report. By January 1, the Secretary and Attorney General must jointly report to Congress the prior fiscal year's Trust Fund amounts and sources under paragraph (2)(A), and amounts appropriated from the Fund under paragraph (3) and why they were spent.

(6) GAO report. By June 1, 1998, and January 1 of 2000, 2002, and 2004, the Comptroller General must report on the prior 2 fiscal years: (A) Trust Fund amounts and sources under paragraph (2)(A), and paragraph (3) spending and justification; (B) spending on activities not involving this subchapter; (C) savings to the Trust Fund and other savings from the spending; and (D) other Fund-operation matters the Comptroller General considers appropriate.

(7) Additional funding. In addition to paragraphs (3) and (4) funding, $10 million is appropriated to the Account from the Trust Fund for each fiscal year 2011–2020 for the purposes in paragraphs (3)(C) and (4)(A). It must be allocated in the same proportion as total paragraphs (3)(A) and (4)(A) funding was allocated for fiscal year 2010 and remains available until spent.

(8) Additional funding. (A) In addition to the other funding for paragraphs (3)(C) and (4)(A), the Trust Fund must provide: $95 million for 2011; $55 million for 2012; $30 million for each of 2013 and 2014; and $20 million for each of 2015 and 2016. (B) These amounts must be allocated in the same proportion as paragraphs (3)(A) and (4)(A) funding was allocated for 2010 and remain available until spent.

This section does not define "unduly small," "current withdrawals," "public interest," "Hospital Insurance Trust Fund ratio," "OASDI trust fund ratio," "Federal health care offense," or "health care cases."