[Code of Federal Regulations]
[Title 42, Volume 3]
[Revised as of October 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR489.67]

[Page 957-958]
 
                         TITLE 42--PUBLIC HEALTH
 
  CHAPTER IV--CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF 
                  HEALTH AND HUMAN SERVICES (CONTINUED)
 
PART 489_PROVIDER AGREEMENTS AND SUPPLIER APPROVAL--Table of Contents
 
               Subpart F_Surety Bond Requirements for HHAs
 
Sec. 489.67  Term and type of bond.

    (a) Each participating HHA that does not meet the criteria for 
waiver under Sec. 489.62 must submit to CMS in a form as CMS may 
specify, a surety bond for a term beginning January 1, 1998. If an 
annual bond is submitted for the initial term, it must be effective 
through the end of the HHA's current fiscal year.

[[Page 958]]

    (b) Type of bond. The type of bond required to be submitted by an 
HHA under this subpart may be either--
    (1) An annual bond (that is, a bond that specifies an effective 
annual period corresponding to the HHA's fiscal year); or
    (2) A continuous bond (that is, a bond that remains in full force 
and effect from term to term unless it is terminated or canceled as 
provided for in the bond or as otherwise provided by law) that is 
updated by the Surety, via the issuance of a rider, for a particular 
fiscal year for which the bond amount has changed or will change.
    (c) HHA that seeks to become a participating HHA.
    (1) An HHA that seeks to become a participating HHA must submit a 
surety bond with its enrollment application (Form CMS-855, OMB number 
0938-0685). The term of the initial surety bond must be effective from 
the effective date of provider agreement as specified in Sec. 489.13 of 
this part. However, if the effective date of the provider agreement is 
less than 30 days before the end of the HHA's current fiscal year, the 
HHA may obtain a bond effective through the end of the next fiscal year, 
provided the amount of the bond is the greater of $75,000 or 20 percent 
of the amount determined from the computation specified in Sec. 
489.65(c) as applicable.
    (2) An HHA that seeks to become a participating HHA through the 
purchase or transfer of assets or ownership interest of a participating 
or formerly participating HHA must also ensure that the surety bond is 
effective from the date of such purchase or transfer.
    (d) Change of ownership. An HHA that undergoes a change of ownership 
must submit the surety bond to CMS not later than the effective date of 
the change of ownership and the bond must be effective from the 
effective date of the change of ownership through the remainder of the 
HHA's fiscal year.
    (e) Government-operated HHA that loses its waiver. A government-
operated HHA that, as of January 1, 1998, meets the criteria for waiver 
under Sec. 489.62 but thereafter is determined by CMS to not meet such 
criteria, must submit a surety bond to CMS within 60 days after it 
receives notice from CMS that it no longer meets the criteria for 
waiver.
    (f) Change of Surety. An HHA that obtains a replacement surety bond 
from a different Surety to cover the remaining term of a previously 
obtained bond must submit the new surety bond to CMS within 30 days of 
obtaining the bond from the new Surety.

(Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 
1302 and 1395hh)).

[63 FR 315, Jan. 5, 1998, as amended at 63 FR 10731, Mar. 4, 1998; 63 FR 
29656, June 1, 1998; 63 FR 41171, July 31, 1998]