[Code of Federal Regulations]

[Title 42, Volume 3]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 42CFR489.65]



[Page 957]

 

                         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. 489.65  Amount of the bond.



    (a) Basic rule. The amount of the surety bond must be $50,000 or 15 

percent of the Medicare payments made by CMS to the HHA in the HHA's 

most recent fiscal year for which a cost report has been accepted by 

CMS, whichever is greater.

    (b) Computation of the 15 percent: Participating HHA.

    The 15 percent is computed as follows:

    (1) For the initial bond--on the basis of Medicare payments made by 

CMS to the HHA in the HHA's most recent fiscal year as shown in the 

HHA's most recent cost report that has been accepted by CMS. If the 

initial bond will cover less than a full fiscal year, the computation of 

the 15 percent will be based on the number of months of the fiscal year 

that the bond will cover.

    (2) For subsequent bonds--on the basis of Medicare payments made by 

CMS in the most recent fiscal year for which a cost report has been 

accepted. However, if payments in the first six months of the current 

fiscal year differ from such an amount by more than 25 percent, then the 

amount of the bond is 15 percent of such payments projected on an 

annualized basis.

    (c) Computation of 15 percent: An HHA that seeks to become a 

participating HHA by obtaining assets or ownership interest. For an HHA 

that seeks to become a participating HHA by purchasing the assets or the 

ownership interest of a participating or formerly participating HHA, the 

15 percent is computed on the basis of Medicare payments made by CMS to 

the participating or formerly participating HHA in the most recent 

fiscal year that a cost report has been accepted.

    (d) Change of ownership. For an HHA that undergoes a change of 

ownership the 15 percent is computed on the basis of Medicare payments 

made by CMS to the HHA for the most recently accepted cost report.

    (e) An HHA that seeks to become a participating HHA without 

obtaining assets or ownership interest. For an HHA that seeks to become 

a participating HHA without purchasing the assets or the ownership 

interest of a participating or formerly participating HHA, the 15 

percent computation does not apply.

    (f) Exception to the basic rule. If an HHA's overpayment in the most 

recently accepted cost report exceeds 15 percent of annual payments, CMS 

may require the HHA to secure a bond in an amount up to or equal to the 

amount of overpayment, provided the amount of the bond is not less than 

$50,000.

    (g) Expiration of the 15 percent provision. For an annual surety 

bond, or for a rider on a continuous surety bond, that is required to be 

submitted on or after June 1, 2005, notwithstanding any reference in 

this subpart to 15 percent as a basis for determining the amount of the 

bond, the amount of the bond or rider, as applicable, must be $50,000 or 

such amount as CMS specifies in accordance with paragraph (f) of this 

section, whichever amount is greater.



[63 FR 313, Jan. 5, 1998, as amended at 63 FR 29655, June 1, 1998]