AGING AND DISABILITY SERVICES ADMINISTRATION

2006 NH "Dear Administrator" Letters

February 3, 2006

ADSA: NH #2006-003
Surety Bond Update

Dear Nursing Facility/Home Administrator:

This letter replaces Administrator Letter #99-006. The purpose of this letter is to share recent Center of Medicare and Medicaid Services (CMS) clarifications regarding nursing home prepayment requirements, protection of resident funds and surety bond requirements.

Here are some highlights from the CMS clarification:

• Skilled nursing facilities and nursing facilities may not require any prepayments or deposits from Medicare of Medicaid recipients. However, prepayments can be solicited from individuals who are not covered by Medicare or Medicaid.
• A nursing facility may require a deposit from an applicant whose Medicaid eligibility is pending, and it may require a resident whose Medicaid eligibility is pending to pay for services that have been provided. However, when a resident’s Medicaid eligibility is established, the facility must refund to the resident any deposit that was required prior to eligibility and any payments that will be covered retroactively by Medicaid.
• The nursing facility’s surety bond (or other acceptable security device, such as assignment of time deposits) must be sufficient to secure all resident funds, including resident funds voluntarily deposited with the facility and any refundable deposit fees.

You may access sample surety bond or assignment of time deposit forms online at

http://www.adsa.dshs.wa.gov/professional/nh.htm.

If you have any questions on these requirements, please feel free to contact your RCS Field Manager.

Sincerely,

Joyce Pashley Stockwell, Director
Residential Care Services