January 1998

Health Care E-lert - How to Get Required Surety Bonds For Home Health Agencies, 1/15/98

2 min

Will my HHA require 1 bond or 2?

Every HHA that participates in the Medicare program or the Medicaid program is required to obtain a surety bond. If your HHA participates in both Medicare and Medicaid, you must obtain a bond for each program.

Where do I get a surety bond?

A list of authorized surety companies has been assembled. The surety company must have a Certificate of Authority issued by the U.S. Department of Treasury.

What is the amount of the required surety bond?

Medicare: $50,000 or 15% of the annual amount paid to the HHA by Medicare, as reflected in the HHA’s most recent cost report. The 15% will be prorated for the first year.

Medicaid: $50,000 or 15% of the amount paid to the HHA by the State Medicaid agency for the most recent annual period for which data is available.
To whom is the surety bond payable?

The surety bond for Medicare must name the HHA as "Principal," HCFA as "Obligee," and the surety company as "Surety."

The surety bond for Medicaid must name the DHMH as "Obligee."
Where do I submit a surety bond?

Surety bonds for Medicare must be submitted to HCFA. Surety bonds for Medicaid must be submitted to Medicaid.
What form do I use?

No form exists as of this date. Submit a copy of the surety bond to the appropriate agency listed above.
What is the deadline for obtaining surety bonds?

The surety bonds must be submitted by February 28, 1998. For subsequent years, the bonds are due no later than 30 days before the start of the HHA’s next fiscal year.
What is the required term of a surety bond?

Surety bonds submitted by February 28, 1998 must carry an effective date of January 1, 1998 through the end of the HHA’s fiscal year. Thereafter, each HHA must annually submit a surety bond at least 30 days before the start of the HHA’s next fiscal year.

Other information: Rules for DME suppliers have not been issued. Minimum capital rules apply to new HHAs and for changes in ownership.