441—77.9 (249A) Home health agencies. Home health agencies are eligible to participate providing they are certified to participate in the Medicare program (Title XVIII of the Social Security Act) and, unless exempted under subrule 77.9(5), have submitted a surety bond as required by subrules 77.9(1) to 77.9(6).
	 77.9(1) Definitions.
“Assets” includes any listing that identifies Medicaid members to whom home health services were furnished by a participating or formerly participating home health agency.
“Rider” means a notice issued by a surety that a change in the bond has occurred or will occur.
“Uncollected overpayment” means a Medicaid overpayment, including accrued interest, for which the home health agency is responsible that has not been recouped by the department within 60 days from the date of notification that an overpayment has been identified.
	 77.9(2) Parties to surety bonds. The surety bond shall name the home health agency as the principal, the Iowa department of human services as the obligee and the surety company (and its heirs, executors, administrators, successors and assignees, jointly and severally) as surety. The bond shall be issued by a company holding a current Certificate of Authority issued by the U.S. Department of the Treasury in accordance with 31 U.S.C. Sections 9304 to 9308 and 31 CFR Part 223 as amended to November 30, 1984, Part 224 as amended to May 29, 1996, and Part 225 as amended to September 12, 1974. The bond shall list the surety’s name, street address or post office box number, city, state and ZIP code. The company shall not have been determined by the department to be unauthorized in Iowa due to:
	  a.   	 Failure to furnish timely confirmation of the issuance of and the validity and accuracy of information appearing on a surety bond that a home health agency presents to the department that shows the surety company as surety on the bond.
	  b.   	 Failure to timely pay the department in full the amount requested, up to the face amount of the bond, upon presentation by the department to the surety company of a request for payment on a surety bond and of sufficient evidence to establish the surety company’s liability on the bond.
	  c.   	 Other good cause.
The department shall give public notice of a determination that a surety company is unauthorized in Iowa and the effective date of the determination by publication of a notice in the newspaper of widest circulation in each city in Iowa with a population of 50,000 or more. A list of surety companies determined by the department to be unauthorized in Iowa shall be maintained and shall be available for public inspection by contacting the division of medical services of the department. The determination that a surety company is unauthorized in Iowa has effect only in Iowa and is not a debarment, suspension, or exclusion for the purposes of Federal Executive Order No.	12549.
	 77.9(3) Surety company obligations. The bond shall guarantee payment to the department, up to the face amount of the bond, of the full amount of any uncollected overpayment, including accrued interest, based on payments made to the home health agency during the term of the bond. The bond shall provide that payment may be demanded from the surety after available administrative collection methods for collecting from the home health agency have been exhausted.
	 77.9(4) Surety bond requirements. Surety bonds secured by home health agencies participating in Medicaid shall comply with the following requirements:
	  a.   	 Effective dates and submission dates.
	 (1) 	 Home health agencies participating in the program on June 10, 1998, shall secure either an initial surety bond for the period January 1, 1998, through the end of the home health agency’s fiscal year or a continuous bond which remains in effect from year to year.
	 (2) 	 Home health agencies seeking to participate in Medicaid and Medicare for the first time after June 10, 1998, shall secure an initial surety bond for the period from Medicaid certification through the end of the home health agency’s fiscal year or a continuous bond which remains in effect from year to year.
	 (3) 	 Medicare-certified home health agencies seeking to participate in Medicaid for the first time after June 10, 1998, shall secure an initial surety bond for the period from Medicaid certification through the end of the home health agency’s fiscal year or a continuous bond which remains in effect from year to year.
	 (4) 	 Home health agencies seeking to participate in Medicaid after purchasing the assets of or an ownership interest in a participating or formerly participating agency shall secure an initial surety bond effective as of the date of purchase of the assets or the transfer of the ownership interest for the balance of the current fiscal year of the home health agency or a continuous bond which remains in effect from year to year.
	 (5) 	 Home health agencies which continue to participate in Medicaid after the period covered by an initial surety bond shall secure a surety bond for each subsequent fiscal year of the home health agency or a continuous bond which remains in effect from year to year.
	  b.   	 Amount of bond. Bonds for any period shall be in the amount of $50,000 or 15 percent of the home health agency’s annual Medicaid payments during the most recently completed state fiscal year, whichever is greater. After June 1, 2005, all bonds shall be in the amount of $50,000. At least 90 days before the start of each home health agency’s fiscal year, the department shall provide notice of the amount of the surety bond to be purchased and submitted to the Iowa Medicaid enterprise provider services unit.
	  c.   	 Other requirements. Surety bonds shall meet the following additional requirements. The bond shall:
	 (1) 	 Guarantee that upon written demand by the department to the surety for payment under the bond and the department’s furnishing to the surety sufficient evidence to establish the surety’s liability under the bond, the surety shall within 60 days pay the department the amount so demanded, up to the stated amount of the bond.
	 (2) 	 Provide that the surety’s liability for uncollected overpayments is based on overpayments determined during the term of the bond.
	 (3) 	 Provide that the surety’s liability to the department is not extinguished by any of the following:
	  1. 	 Any action by the home health agency or the surety to terminate or limit the scope or term of the bond unless the surety furnishes the department with notice of the action not later than 10 days after the date of notice of the action by the home health agency to the surety and not later than 60 days before the effective date of the action by the surety.
	  2. 	 The surety’s failure to continue to meet the requirements in subrule 77.9(2) or the department’s determination that the surety company is an unauthorized surety under subrule 77.9(2).
	  3. 	 Termination of the home health agency’s provider agreement.
	  4. 	 Any action by the department to suspend, offset, or otherwise recover payments to the home health agency.
	  5. 	 Any action by the home health agency to cease operations, sell or transfer any assets or ownership interest, file for bankruptcy, or fail to pay the surety.
	  6. 	 Any fraud, misrepresentation, or negligence by the home health agency in obtaining the surety bond or by the surety (or the surety’s agent, if any) in issuing the surety bond; except that any fraud, misrepresentation, or negligence by the home health agency in identifying to the surety (or the surety’s agent) the amount of Medicaid payments upon which the amount of the surety bond is determined shall not cause the surety’s liability to the department to exceed the amount of the bond.
	  7. 	 The home health agency’s failure to exercise available appeal rights under Medicaid or assign appeal rights to the surety.
	 (4) 	 Provide that if a home health agency fails to furnish a bond following the expiration date of an annual bond or if a home health agency fails to furnish a rider for a year in which a rider is required or if the home health agency’s provider agreement with the department is terminated, the surety shall remain liable under the most recent annual bond or rider to a continuous bond for two years from the date the home health agency was required to submit the annual bond or rider to a continuous bond or for two years from the termination date of the provider agreement.
	 (5) 	 Provide that actions under the bond may be brought by the department or by an agent designated by the department.
	 (6) 	 Provide that the surety may appeal department decisions.
	 77.9(5) Exemption from surety bond requirements for government-operated home health agencies. A home health agency operated by a federal, state, local, or tribal government agency is exempt from the bonding requirements of this rule if, during the preceding five years, the home health agency has not had any uncollected overpayments. Government-operated home health agencies having uncollected overpayments during the preceding five years shall not be exempted from the bonding requirements of this rule.
	 77.9(6) Government-operated home health agency that loses its exemption. A government-operated home health agency which has met the criteria for an exemption under subrule 77.9(6) but is later determined by the department not to meet the criteria shall submit a surety bond within 60 days of the date of the department’s written notification to the home health agency that it no longer meets the criteria for an exemption, for the period and in the amount required in the notice from the department.