Medicare and Medicaid Programs; Surety Bond Requirements for Home Health Agencies

The Balanced Budget Act of 1997 (BBA'97) requires each home health agency (HHA), in order to participate in either the Medicare or the Medicaid program, to secure a surety bond. On January 5, 1998, we published a final rule with comment period that requires that each Medicare-participating HHA obtain from an acceptable authorized Surety a surety bond that is the greater of $50,000 or 15 percent of the annual amount paid to the HHA by the Medicare program, as reflected in the HHA's most recently accepted cost report. The rule also requires that an HHA participating in Medicaid must furnish a surety bond in an amount that is the greater of $50,000 or 15 percent of its Medicaid revenues to the Medicaid State agency in each State in which it operates. The rule also requires submittal of the initial bond to HCFA or the State Medicaid agency, or both--as applicable--by February 27, 1998. Because some HHAs have not been able to obtain a surety bond in time to meet the February 27 date, we are removing the date by which HHAs are required to submit the bonds to HCFA and/or the State Medicaid Agency.