Surety bond revisions leave HHAs in the cold
The Baltimore-based Health Care Financing Administration (HCFA) has finally released proposed "technical revisions" to its controversial surety bond regulations for home health providers. But these revisions, meant to ease the nerves of surety bond providers, don't go nearly far enough in addressing the concerns of home health agencies themselves, critics claim.
In the notice, which appeared in the March 4 Federal Register, HCFA states that the changes are "in keeping with standard industry practice, and will help smaller, reputable home health agencies obtain bonds without weakening the bonds' ability to keep unscrupulous agencies out of Medicare and Medicaid."
HCFA also notes that, because of the changes, the deadline for agencies to obtain bonds will be 60 days after the publication of the final regulation. No date's yet been set for publication of the final rule, but HCFA says it should be issued sometime shortly after the comment period, which closed March 6. (See related story, page 2.)
HCFA's technical changes include:
1. Generally limiting the surety bond company's liability on the bond to the term when it is determined that funds owed to Medicare and Medicaid have become "unpaid," regardless of when the payment, overpayment, or other action causing such funds to be owed took place.
According to HCFA, Bond writers will now be liable only for determinations made during the year for which the bond is written or the "period of discovery."
Previously, bond writers were to be held liable for determinations made up to six years after the bond was written. The change, HCFA claims, will "make it easier to determine bond writers' actual risk, and that will make bonds more affordable."
2. Establishing that a surety bond company will remain liable on a bond for an additional two years after the date a home health agency leaves the Medicare or Medicaid program.
The term of the bond will automatically extend two years after the date an agency is terminated from Medicare, "voluntarily or not." This provides added protection for Medicare and "sets a clear limit on bond writers' liability" if Medicare terminates an agency, HCFA says.
3. Giving a surety bond company the right to appeal an overpayment, civil monetary penalty or an assessment if the home health agency to which the bond has been issued fails to pursue its right of appeal.
This recognizes that bond writers should have appeal rights, HCFA says. Bond writers would not, however, be able to appeal if an agency has appealed and lost.
While these changes should allay the fears of surety bond providers who have argued that the original rules put them at severe financial risk, "the majority of the problems the home care industry has had with the regulations persist," says Theresa Forster, vice president of policy with the National Association for Home Care (NAHC) in Washington.
For example, Forster notes, "although the notice indicates that HCFA is willing to reconsider its proposed level of the bond-that is, the greater of $50,000 or 15% of Medicare or Medicaid revenues, with no upper limit-it has not signaled a clear intention to change the bond formula."
Forster also worries that the changes may do little to discourage surety bond companies from imposing stiff collateral requirements or personal guarantees from home health providers.
NAHC also objects to the fact that the HCFA's rule continues to deviate from the Florida model on which it was based. Under the Florida rule, most agencies were required to post a surety bond only for one year. HCFA still hasn't addressed whether agencies will be required to post the bond every year, Forster says.
"Also, the notice does not include the formal regulatory language that HCFA intends to implement," Forster notes. "Therefore, some bond companies may still not be willing to change their current policies until a final rule is published."
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content