[Federal Register Volume 63, Number 42 (Wednesday, March 4, 1998)]
[Rules and Regulations]
[Pages 10730-10731]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-5655]


      

[[Page 10729]]

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Part VI





Department of Health and Human Services





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Health Care Financing Administration



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42 CFR Parts 441, 489 and Ch. IV



Medicare and Medicaid Programs: Surety Bond Requirements for Home 
Health Agencies; Final Rule and Technical Revisions; Proposed Rule

  Federal Register / Vol. 63, No. 42 / Wednesday, March 4, 1998 / Rules 
and Regulations  

[[Page 10730]]



DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 441 and 489

[HCFA-1152-F]
RIN 0938-AI31


Medicare and Medicaid Programs; Surety Bond Requirements for Home 
Health Agencies

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Final rule.

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SUMMARY: The Balanced Budget Act of 1997 (BBA'97) requires each home 
health agency (HHA), in order to participate in either the Medicare or 
the Medicaid program, to secure a surety bond. On January 5, 1998, we 
published a final rule with comment period that requires that each 
Medicare-participating HHA obtain from an acceptable authorized Surety 
a surety bond that is the greater of $50,000 or 15 percent of the 
annual amount paid to the HHA by the Medicare program, as reflected in 
the HHA's most recently accepted cost report. The rule also requires 
that an HHA participating in Medicaid must furnish a surety bond in an 
amount that is the greater of $50,000 or 15 percent of its Medicaid 
revenues to the Medicaid State agency in each State in which it 
operates. The rule also requires submittal of the initial bond to HCFA 
or the State Medicaid agency, or both--as applicable--by February 27, 
1998. Because some HHAs have not been able to obtain a surety bond in 
time to meet the February 27 date, we are removing the date by which 
HHAs are required to submit the bonds to HCFA and/or the State Medicaid 
Agency.

EFFECTIVE DATE: This final rule is effective on March 4, 1998.

FOR FURTHER INFORMATION CONTACT: Ralph Goldberg, (410)786-4870 
(Medicare Provisions). Mary Linda Morgan, (410)786-2011 (Medicaid 
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 in 
the Federal Register a final rule on January 5, 1998 (63 FR 292-355) to 
implement the surety bond requirements. The comment period on that 
final rule continues until March 6, 1998.
    Generally, the rule requires each HHA participating in Medicare to 
obtain from an acceptable 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 date for submittal of an initial surety bond 
to HCFA and/or the State Medicaid agency is February 27, 1998.

II. Provisions of this Final Rule

    Concerns about Surety liability issues have been raised by 
representatives of the surety industry as well as by home health agency 
representatives. We address these concerns in a notice published 
elsewhere in this edition of the Federal Register. Those issues were 
not apparent during our previous discussions with the representatives 
prior to the publication of the final rule on January 5, 1998. 
Therefore, because of resultant delays in the ability of some HHAs to 
secure surety bonds in time to meet the February 27, 1998 date for 
submittal to HCFA and/or the state Medicaid agency, we believe it is 
now prudent to extend the February 27, 1998 effective date for HHAs to 
furnish a bond. This final rule deletes the February 27, 1998 effective 
date for all HHAs to furnish a surety bond. The new compliance date 
will be 60 days after the date of publication of the final rule that 
implements the technical changes discussed in the notice appearing 
elsewhere in this edition of the Federal Register.

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 it incorporates a 
statement of the finding and its reasons in the rule issued.
    We find good cause to waive the notice-and-comment procedure with 
respect to this rule because it is impracticable to employ notice and 
comment procedures and issue a rule on or before the current effective 
date for bond submission. We also find good cause to waive notice and 
comment procedures with respect to this rule because employing such 
procedures would, in this instance, be contrary to the public interest. 
We believe that some reputable HHAs are unable to secure the surety 
bond in time to meet the date currently specified in the regulations, 
which could result in HHAs being unable to participate in Medicare or 
Medicaid. Such a result could reduce significantly access to care by 
program beneficiaries and that outcome would be contrary to the public 
interest.
    For these reasons, we find good cause to waive notice-and-comment 
and to issue this final rule.

IV. Waiver of 30-Day Interim Period Before Rule is Effective

    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, the 30-day interim period 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 and the agency publishes a brief 
statement with the rule of its findings and the reason therefore.
    We find good cause to make the provisions of this rule effective on 
publication in the Federal Register. For the reasons discussed above in 
section III. of this preamble, ``Waiver of Proposed Rulemaking,'' i.e., 
because we find it necessary to amend the requirement for the 
submission of a surety bond to delay the effective date beyond February 
27, 1998, it would be both impracticable and contrary to the public 
interest to delay the effective date of this rule. Therefore, we find 
good cause to waive the 30-day interim period for this rule. Therefore, 
we have made the effective date the date of publication in the Federal 
Register.
    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:

[[Page 10731]]

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. Section 441.16(i)(1)(i) is revised to read as follows:


Sec. 441.16  Home health agency requirements for surety bonds; 
Prohibition on FFP.

* * * * *
    (i) Submission date and term of the bond.
    (1) * * *
    (i) Initial term: The term of the initial bond is from January 1, 
1998 through a date specified by the State Medicaid agency.
* * * * *

PART 489--PROVIDER AGREEMENTS AND SUPPLIER APPROVAL

    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. Section 489.67(a)(1) is revised to read as follows:


Sec. 489.67  Submission date and term of the bond.

    (a) * * *
    (1) Initial term: The term of the initial bond is from January 1, 
1998 through the end of the HHA's 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 Program, and Program No. 
93.778, Medical Assistance Program)

    Dated: February 26, 1998.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration.

    Dated: February 26, 1998.
Donna E. Shalala,
Secretary.
[FR Doc. 98-5655 Filed 2-27-98; 5:05 pm]
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