Providers Mobilize Against Home Health Surety Bonds

Leaders in the home health care industry are urging providers to voice their opposition to recently proposed surety bonds, which one association says could have “serious negative effects” for home health businesses.

The National Association for Home Care & Hospice, a nonprofit advocacy group, is leading the charge by encouraging providers to contact their elected officials and ask them to oppose “this misguided initiative.”

NAHC’s opposition stems from President Barack Obama’s 2016 budget proposal, which includes a provision to “increase the required surety bond amount for Medicare home health agencies to an amount that is no less than $50,000 and commensurate with the volume of payments to the agency,” the association says.

However, industry leaders say doing so could hurt small home health agencies, which may struggle to comply with regulatory burdens, as well as those longstanding and ethical providers who present little risk to Medicare.

“It’s a very un-targeted measure,” William Dombi, vice president for law at NAHC, tells Home Health Care News. “It just really grates the home health community if they have to continue to pay these unfunded mandates to cover the losses caused by very few bad guys. We’re saying, ‘Come up with measures that are targeted — go after the bad guys.'”

Dombi notes that surety bonds, if imposed, should be targeted only to new providers, as longstanding providers present less of a risk to Medicare.

Surety bonds have a long history that dates back nearly two decades, when the Balanced Budget Act of 1997 established a surety bond requirement for home health agencies. However, the provision in the law was never enforced and remains unimplemented today, despite efforts by some to impose it.

In 2012, the Office of the Inspector General (OIG) recommended that the federal Medicare agency implement the home health agency surety bond requirement in order to recoup a higher percentage of overpayments made to providers. The OIG also proposed that bond amounts increase to $50,000 or more for those agencies with high overall Medicare payment amounts.

“In recent times, the talk about surety bonds has gotten louder — louder at the inspector general’s office and louder in Congress as well, which is why we’re raising the alert.”

Written by Emily Study