98-20628. Medicare and Medicaid Programs; Surety Bond Requirements for Home Health Agencies  

  • [Federal Register Volume 63, Number 147 (Friday, July 31, 1998)]
    [Rules and Regulations]
    [Pages 41170-41171]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 98-20628]
    
    
    
    [[Page 41169]]
    
    _______________________________________________________________________
    
    Part V
    
    
    
    
    
    Department of Health and Human Services
    
    
    
    
    
    _______________________________________________________________________
    
    
    
    Health Care Financing Administration
    
    
    
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    42 CFR Parts 441 and 489
    
    
    
    Medicare and Medicaid Programs: Surety Bond Requirements for Home 
    Health Agencies; Final Rule
    
    Federal Register / Vol. 63, No. 147, Friday, July 31, 1998 / Rules 
    and Regulations
    
    [[Page 41170]]
    
    
    
    DEPARTMENT OF HEALTH AND HUMAN SERVICES
    
    Health Care Financing Administration
    
    42 CFR Parts 441 and 489
    
    [HCFA-1152-2-F]
    RIN 0938-AJ08
    
    
    Medicare and Medicaid Programs; Surety Bond Requirements for Home 
    Health Agencies
    
    AGENCY: Health Care Financing Administration (HCFA), HHS.
    
    ACTION: Final rule.
    
    -----------------------------------------------------------------------
    
    SUMMARY: This final rule revised Medicare and Medicaid regulations 
    concerning surety bond requirements published in the Federal Register 
    (63 FR 29648) on June 1, 1998. Those regulations specified submission 
    compliance dates for all home health agencies (HHAs) to furnish a 
    surety bond to HCFA and/or to the State Medicaid agency. This rule 
    removes those submission compliance dates.
    
    EFFECTIVE DATE: This final rule is effective on July 31, 1998.
    
    FOR FURTHER INFORMATION CONTACT: Ralph Goldberg, (410) 786-4870 
    (Medicare Provisions. Mary Linda Morgan, (410) 786-2011 (Medicare 
    Provisions.
    
    SUPPLEMENTARY INFORMATION: 
    
    I. Background
    
        The Balanced Budget Act of 1997 (BBA '97) requires each home health 
    agency (HHA) to secure a surety bond in an amount of at least $50,000 
    in order to participate in either the Medicare or the Medicaid program. 
    This requirement applies to all participating Medicare and Medicaid 
    HHAs, regardless of the date their participation began. We published a 
    final rule in the Federal Register on January 5, 1998 (63 FR 292-355) 
    to implement the surety bond requirements.
        Generally, that rule requires each HHA participating in Medicare to 
    obtain from an authorized Surety and then to furnish to the fiscal 
    intermediary a surety bond in an amount that is the greater of $50,000 
    or 15 percent of the annual amount paid to the HHA by the Medicare 
    program, as such annual amount appears in the HHA's most recently 
    accepted cost report.
        The rule also prohibits payment to a State for home health services 
    furnished to Medicaid recipients unless the HHA has furnished the 
    Medicaid State agency with a surety bond similar to one that meets 
    Medicare requirements. The amount of the Medicaid surety bond would be 
    the greater of $50,000 or 15 percent of the annual amount paid to the 
    HHA by the Medicaid State agency for home health services.
        As a result of technical issues concerning potential Surety 
    liability raised by representatives of both the Surety and HHA 
    industries after the publication of the January 5, 1998 final rule, we 
    published a notice in the Federal Register on March 4, 1998 (63 FR 
    10732). That notice advised the public that we intended to make 
    technical revisions to the January 5, 1998 final rule. In another final 
    rule also published in the March 4, 1998 Federal Register (63 FR 
    10730), we removed the February 27, 1998 bond submission compliance 
    date, and announced that we intended to establish a new submission 
    compliance date that would be a date 60 days after the publication of a 
    subsequent final rule.
        On June 1, 1998, an additional final rule was published in the 
    Federal Register (63 FR 29648), that addressed all of the technical 
    changes announced in the March 4, 1998 notice and revised certain 
    sections of the January 5, 1998 final rule. That rule also established 
    that the initial submission of a surety bond for Medicare is July 31, 
    1998 and for Medicaid by a date specified by each Medicaid State agency 
    but no later than September 29, 1998.
        Because of significant concerns expressed by the United States 
    Congress and HHAs, and notification that the General Accounting Office 
    (GAO) is investigating issues surrounding the surety bond requirement 
    we will suspend the compliance date until we evaluate the GAO report.
        Although the surety bond requirements remain in effect, the 
    practical effect of this document is to absolve participating HHAs from 
    having to show compliance with the requirements until 60 days following 
    publication of a new final rule but no earlier than February 15, 1999.
    
    II. Provisions of this Final Rule
    
        This rule removes the submission compliance dates that specify when 
    participating HHAs must submit a surety bond in both the Medicare and 
    Medicaid programs.
    
    III. Waiver of Proposed Rulemaking
    
        We ordinarily publish a notice of proposed rulemaking in the 
    Federal Register and invite prior public comment on proposed rules. The 
    notice of proposed rulemaking can be waived, however, if an agency 
    finds good cause that notice-and-comment procedure is impracticable, 
    unnecessary, or contrary to the public interest and incorporates a 
    statement of the finding and its reasons in the rule issued. We find 
    good cause to waive the notice-and-comment procedure because it is 
    impracticable to employ notice and comment procedures and issue a final 
    rule on or before the earliest date currently required for HHAs to 
    comply with surety bond submission (July 31, 1998). For this reason, we 
    find good cause to waive notice-and-comment and to issue this final 
    rule.
    
    IV. Waiver of 30-Day Delay in Effective Date
    
        We ordinarily make the effective date of a final rule at least 30 
    days after the publication of the rule in the Federal Register. 
    However, this 30-day delay can be waived if an agency finds good cause 
    for making the effective date of the rule earlier than 30 days after 
    the publication of the rule. For the same reason discussed in section 
    III. above we find it would be impracticable to delay the effective 
    date of this rule. Therefore, we find good cause to waive the 30-day 
    delay in the effective date for this rule and have made the effective 
    date the date of publication in the Federal Register.
    
    V. OMB Review
    
        In accordance with the provisions of E.O. 12866, this document was 
    reviewed by the Office of Management and Budget.
    
    List of Subjects
    
    42 CFR Part 441
    
        Family planning, Grant programs--health, Infants and children, 
    Medicaid, Penalties, Reporting and recordkeeping requirements.
    
    42 CFR Part 489
    
        Health facilities, Medicare, Reporting and recordkeeping 
    requirements.
        42 CFR Chapter IV is amended as set forth below:
    
    PART 441--SERVICES: REQUIREMENTS AND LIMITS APPLICABLE TO SPECIFIC 
    SERVICES
    
        A. Part 441 is amended as follows:
        1. The authority citation for part 441 continues to read as 
    follows:
    
        Authority: Sec. 1102 of the Social Security Act (42 U.S.C. 
    1302).
    
        2. In Sec. 441.16 the heading of paragraph (i) and paragraph (i)(1) 
    are revised to read as follows: Sec. 441.16 Home health agency 
    requirements for surety bonds; Prohibition on FFP.
    * * * * *
    
        (i) Term and type of bond. (1) Initial term: Each participating HHA 
    that is not
    
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    exempted by paragraph (d) of this section must submit to the State 
    Medicaid agency a surety bond for a term beginning January 1, 1998. If 
    an annual bond is submitted for the initial term it must be effective 
    for an annual period specified by the State Medicaid agency.
    * * * * *
    
    PART 489--PROVIDER AGREEMENTS AND SUPPLIER APPROVALS
    
        B. Part 489 is amended as follows:
        1. The authority citation for part 489 continues to read as 
    follows:
    
        Authority: Secs. 1102 and 1871 of the Social Security Act (42 
    U.S.C. 1302 and 1395hh).
    
        2. in Sec. 489.67 the heading and paragraph (a) are revised to read 
    as follows:
    
    
    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 HCFA in a form as HCFA 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.
    * * * * *
    (Authority: Secs. 1102 and 1871 of the Social Security Act (42 
    U.S.C. 1302 and 1395hh)).
    
    (Catalog of Federal Domestic Assistance Program No. 93.774, 
    Medicare--Supplementary Medical Insurance Programs, and Program No. 
    93.778, Medical Assistance Program).
    
        Dated July 27, 1998.
    Nancy-Ann Min DePearle,
    Administrator, Health Care Financing Administration.
    
        Dated July 28, 1998.
    Donna E. Shalala,
    Secretary.
    [FR Doc. 98-20628 Filed 7-29-98; 1:38 pm]
    BILLING CODE 4120-01-M
    
    
    

Document Information

Effective Date:
7/31/1998
Published:
07/31/1998
Department:
Health Care Finance Administration
Entry Type:
Rule
Action:
Final rule.
Document Number:
98-20628
Dates:
This final rule is effective on July 31, 1998.
Pages:
41170-41171 (2 pages)
Docket Numbers:
HCFA-1152-2-F
RINs:
0938-AJ08
PDF File:
98-20628.pdf
CFR: (1)
42 CFR 489.67