Medicare Home Health Agencies: Role of Surety Bonds in Increasing Scrutiny and Reducing Overpayments
Highlights
Pursuant to a congressional request, GAO evaluated the surety bond requirements for home health agencies (HHA) participating in Medicare, focusing on: (1) analyzing the key features of surety bonds that affect their costs and effect; (2) examining the Florida Medicaid program's experience with a surety bond requirements for HHAs and its relevance to the Medicare surety bond requirement; (3) reviewing the rationale for the surety bond requirements the Health Care Financing Administration (HCFA) selected, the cost and availability of bonds, the benefits for Medicare, and the implications of substituting a government note for a surety bond as set forth in a Department of the Treasury regulation; and (4) drawing implications from the implementation of the HHA surety bond requirement for implementing a similar surety bond provision for durable medical equipment (DME) suppliers, comprehensive outpatient rehabilitation facilities (CORF), and rehabilitation agencies.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| With respect to the surety bond requirements that GAO is recommending, Congress may wish to consider exempting from a surety bond requirement HHAs that have demonstrated fiscal responsibility--for example, those that have maintained a bond for a specified period of time and have returned any overpayments. |
Closed – Not Implemented
|
Congress has not yet acted on this recommendation as of August 2005. |
| With respect to the surety bond requirements that GAO is recommending, Congress may wish to consider eliminating the option for HHAs of substituting a Treasury note, U.S. bond, or other federal public debt obligation for a surety bond. |
Closed – Not Implemented
|
Congress has not yet acted on this recommendation as of August 2005. |
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Health Care Financing Administration | To implement the Balance Budget Act's surety bond requirement for HHAs, Administrator, HCFA, should revise the present regulation so that all HHAs obtain one financial guarantee surety bond in the amount of $50,000 for the guaranteed return of overpayments for both Medicare and Medicaid. |
Closed – Not Implemented
HCFA believes it needs statutory authorization to implement this recommendation. At one time, it had an instruction that one bond for both programs would be acceptable for smaller HHAs, but has since rethought that position, and believes additional statutory authority would be needed for it to be implemented.
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