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Highlights

Pursuant to a congressional request, GAO discussed the status of Medicare's Federal Hospital Insurance Trust Fund. GAO noted that: (1) certain administration officials became aware of the trust fund's operating deficit and first published data on it in October 1995; (2) other officials became aware of the deficit later in the year; (3) although the fund had an operating deficit in October and November 1995, it had a surplus of $747 million for the first quarter of fiscal year (FY) 1996 and $3.3 billion for the first quarter of FY 1995; and (4) increased trust fund outlays were due to hospitals accelerating their submission of claims, hospital admissions and their case mix index increasing faster than estimated, and trust fund receipts being below projected amounts.

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