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UTAH
MEDICAID INFORMATION BULLETIN
Surety
Bond Requirements for H ome Health Agencies
November 1997 through April 1998
Four
bulletins address the federal and state requirements for
a surety bond for home health agencies and medical suppliers.
In November 1997, the first notice was given in Bulletin
97 - 103, followed by additional information in bulletins
dated December 1997 (Bulletin 98-01), February (98-23) and
April (98-38). The bulletins are published here in
reverse chronological order, beginning with the most recent
bulletin.
Go
to the most recent bulletin (April)
Go to the February bulletin
December bulletin
November bulletin
These
bulletins are available in editions for people with disabilities.
Contact Medicaid
Information.
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April 1998
98
- 38 Home Health Agencies: Surety Bond
Health
Care Financing Administration (HCFA) published new proposed
regulations surety bond for home health agencies (HHAs)
on March 4, 1998, in the Federal Register. This is
in response to the inability of many HHAs to obtain a bond
which meets the federal requirements published January 5,
1998.
The
requirement for a HHA to provide a surety bond by February
27, 1998, has been eliminated. HCFA requests HHAs
who have been unable to obtain the bond to notify the State
of that fact "... in writing by March 31, 1998...."
Send the notification to:
Bureau
of Medicaid Operations
Provider Enrollment Section
Box 143106
Salt Lake City UT 84114-3106
Home health agencies will have 60 days from the date the
new final regulations are published to comply with
the bond requirements.
HCFA
instructed Medicaid agencies not to terminate provider
agreements with home health agencies due to the surety bond
requirement at this time. We encourage HHA's to pursue
obtaining the bond. Even though federal regulations
have been revised, the minimum bond remains $50,000 or 15%
of the annualized Medicaid expenditures, whichever amount
is greater.
Any additional
information will be announced as it becomes available on
the Medicaid Internet site. The URL is:
http://www.health.utah.gov/medicaid.
Look
under the heading "What's New".
Provider
Manual Updated for Home Health Agencies
Bulletin
98 - 24, Medicaid Provider Manual Updated for Home
Health Agencies, published February 1998 included the
Home Health Manual dated February 1998.
The HHA manual dated October 1987 and previous Medicaid
bulletins concerning home health services were made obsolete.
Other providers
who want a copy of the manual should FAX or mail
a request to Medicaid
Information for the February 1998 Home Health Services
Manual.
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February
1998
98 - 23 Home Health Agencies: Surety Bond Update
On
January 5, 1998, the Health Care Financing Administration
(HCFA) published regulations regarding the surety bond requirements
for Home Health agencies (HHA) enrolled as Medicaid providers.
The regulations are in the Federal Register dated January
5, 1998, and on the Internet. A new section 441.16
has been added to Title 42, Code of Federal Regulations
(42 CFR). The previous section 441.16 has been renumbered
as 441.17.
Internet
instructions : Go to -
http://www.access.gpo.gov/su_docs/aces/aces140.html
Scroll
down to Federal Register Sections and click
the box for "Final Rules and Regulations". Scroll
down to Issue Date; choose ON and enter 1/5/98.
Scroll down to Search Terms: ; enter "surety bond".
Regulations
May be Amended
HCFA
has advised the State that amendments to the regulations
may be issued in March, and some of the surety bond requirements
may be modified. The amendments are a cooperative
effort with the surety industry to make the bond more obtainable
for home health agencies
Bond
Requirements
The
following is a summary of the bond requirements as issued
on January 5, 1998. New requirements are in bold
text.
A
Home Health agency (HHA) providing Medicaid services must
provide a surety bond issued by an approved surety agency
and effective for services provided on or after January
1, 1998, to the Utah Department of Health, Division
of Health Care Financing, by February 27, 1998.
A list of approved surety agencies is available on the Internet
at -
http://www.fms.treas.gov/c570/index.html
Although
Medicaid is required to follow the Medicare requirements
for surety bonds, a separate bond must be provided to Medicaid.
The bond must name the HHA as the principal; the State
of Utah, Department of Health, as the obligee (the
beneficiary of the bond); and the surety as Surety.
It must contain a clause requiring the surety agency to
notify the State in the event of cancellation.
The
amount of the bond must be a minimum of $50,000 or 15% of
the annualized Medicaid expenditures to the HHA, whichever
amount is greater. However, if a HHA has historical
overpayments that exceed 15% of its total expenditures,
the State may require a bond greater than 15%.
Financial
Viability and Capitalization Requirements
A
home health agency applying to become a new
Medicaid provider must meet new Financial Viability and
Capitalization requirements, as stated in the Federal Regulations.
The HHA must have at least three months of operating capital
initially available and provide documentation that at least
50% of these funds are "the HHA's own, non-borrowed funds
which are not in any way encumbered."
Bond
Form Attached
Attached
is the Home Health Agency: Medicaid Surety Bond Form, which,
when properly completed, will be accepted by Medicaid as
proof of compliance with the surety bond requirements.
Extension
of Deadline
HCFA
will allow an extension of up to 60 days for home health
agencies (HHA's) who can show good cause as to why they
cannot obtain the bond by February 27, 1998. To qualify
for the extension, the HHA must submit a letter to the Utah
Department of Health, Division of Health Care Financing,
on or before February 27, 1998. The HHA must
explain what steps it has taken to obtain a surety bond
and request an extension.
Send
the letter requesting an extension of the deadline
to:
Bureau
of Medicaid Operations
Provider Enrollment Section
Box 143106
Salt Lake City UT 84114-3106
Note
the box number and zip code for Medicaid has changed.
The remainder of the changed box numbers will be announced
in the April bulletin.
Additional
Assistance Needed?
Medicaid
has been informed that failure to obtain the bond will likely
result in recovery action retroactive to the January 1,
1998 date. If you are a HHA which may not be able
to obtain a surety bond by the deadline or the extension,
please contact the Medicaid Provider Enrollment Unit.
In order to ensure uninterrupted service to home health
clients, staff want to assist you to obtain the bond or
transition clients to another agency which has met the bond
requirements.
Call Medicaid
Information;follow instructions on the voice menu
to contact Provider Enrollment.
Further
Information
Any
additional information will be announced on the Medicaid
Internet site as it becomes available:
http://www.health.utah.gov/medicaid/html/provider
under
the heading "What's New".
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97 - 103 Home Health Agencies and
Medical Suppliers: Surety Bond Required
Section
4724 of the Balanced Budget Act of 1997 requires home health
agencies and medical suppliers to furnish a surety bond
to the state in an amount of not less than $50,000.
Please provide the surety bond to the Division of Health
Care Financing by December 15, 1997. Failure
to provide the bond by December 15 may result in delays
in processing your reimbursements after January 1, 1998.
Providers
who do not furnish the bond by January 1, 1998, cannot receive
Medicaid reimbursement for services rendered on or after
that date.
In
early November the Secretary of Health and Human Services
will inform the Division of Health Care Financing of the
specific requirements for the surety bond. However,
we suggest that home health agencies and medical suppliers
begin immediately to develop such a bond. Please direct
questions regarding this requirement to:
Utah
Department of Health
Division of Health Care Financing
Provider Enrollment Section
Box 142911
Salt Lake City UT 84114-2911
For information
via telephone, please call
Medicaid Information:
In
the Salt Lake City area, call 801-538 - 6155.
In
Utah, Idaho, Wyoming, Colorado, New Mexico, Arizona, and
Nevada, call toll-free 1 - 800 - 662 - 9651.
From other states, call 1 - 801 - 538 - 6155. December
1997
98
- 22 Home Health Agencies and Medical Suppliers:
Surety Bond Requirement
The State Medicaid agency has received additional information
from the Health Care Financing Administration (HCFA) on
the surety bond required for home health agencies and durable
medical equipment (DME) suppliers.
Because
of the delay in the issuance of final rules, the State Medicaid
agency will not discontinue paying claims for Medicaid providers
who have not yet furnished the bond.
Durable Medical Equipment Suppliers
DME
suppliers are not required to obtain a surety bond until
the final rule is published. HCFA will publish proposed
rules for DME suppliers early in 1998. Comments will be
allowed, and the final rule will then be published.
Home
Health Agencies
HCFA
now states that home health agencies must furnish the bond
by February 27, 1998 , not January 1 as previously
announced.
However,
until the final rules are published in early 1998, we have
only the following preliminary guidance on the surety bond
requirement: The bond must name the State of Utah, Department
of Health, as the obligee (the beneficiary of the bond);
must be for a minimum of $50,000; and contain a clause requiring
the issuer to notify the state in the event of cancellation.
Although Medicaid will be required to follow the Medicare
requirements for surety bonds, a separate bond must be provided
to Medicaid. Specific requirements will be contained in
the final rules.
Additional Information
The
bond requirement was first announced in Medicaid Information
Bulletin 97 - 103, Home Health Agencies and Medical Suppliers:
Surety Bond Required, published in November 1997. When
we receive final rules on the requirements, we will notify
you immediately. This information will also be published
on the Medicaid Internet site under the heading "What's
New". The Internet address is: http://www.health.utah.gov/medicaid.
Please
direct questions regarding this requirement to:
Utah
Department of Health
Division of Health Care Financing
Provider Enrollment Section
Box 142911
Salt Lake City UT 84114-2911
For
information via telephone, please call Medicaid
Information:
In the Salt Lake City area, call 801-538 - 6155.
In Utah, Idaho, Wyoming, Colorado, New Mexico, Arizona,
and Nevada, call toll-free 1 - 800 - 662 - 9651.
From other states, call 1 - 801 - 538 - 6155.
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