Home Health Agencies --
Processing Initial Applications
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HEALTH CARE FINANCING ADMINISTRATION
CENTER FOR MEDICAID AND STATE OPERATIONS
Chicago Regional Office, Midwest Consortium
DATE: February 6, 1998
TO: State Survey Agency Directors
SUBJECT: Processing Home Health Agency Initials
Earlier, we forwarded to you our Central Office's (CO) January 14, 1998
memorandum on Lifting the Home Health Agency (HHA) Moratorium. More recently, we forwarded
CO's January 30, 1998 "Post-Moratorium HHA Questions and Answers." The purpose
of this memo is to provide guidance for processing initial HHA applications.
Based on the CO memos noted above and other instructions, you are aware
that all HHAs that wish to enter the Medicare program must complete a HCFA-855 enrollment
form, submit a surety bond and show proof that they have enough capital to fund their
first three months of operation. All three (855, bond, and capitalization information) are
to be submitted to you as part of an HHA's request for Medicare participation. No initial
HHA survey can be scheduled without clearance from the Regional Home Health Intermediary
(RHHI) regarding these three items.
(In addition, all currently participating HHAs must obtain surety
bonds. This process is handled by the RHHIs. Advise HHAs with questions on this issue to
contact their RHHI.)
We have consolidated below the steps both you and an applicant HHA must
take before an initial survey can be scheduled.
A. Contact each entity that has a request pending for Medicare approval
as an HHA (parent or subunit), inform the entity that the HHA moratorium has been lifted,
and confirm the entity's interest in continuing the survey and certification process.
B. Similarly, contact each participating HHA that has a request pending
for branch approval. After ascertaining that an HHA continues to want approval for a new
branch, process the request as usual. If you believe that the requested branch is
functioning as a subunit, forward your recommendation to the RO for a determination. New
subunits must meet all enrollment, bond and initial capitalization requirements.
C. Explain the requirement that the HHA have had at least 10 patients
receiving skilled services and that there be 7 active patients receiving skilled services
at the time of the survey. (Venipuncture alone is no longer a qualifying skilled service
for Medicare purposes.) Indicate that these patients need not be Medicare eligible and
that if any are, no reimbursement will be made for care provided prior to the effective
date of the agreement.
As you know, the effective date of a Medicare agreement cannot be any
earlier than the completion of the survey, and may be later. The effective date cannot be
earlier than the date the provider meets all requirements, including enrollment, surety
bond and initial capitalization.
Initial surveys will include home visits to at least 2 active patients.
Home visits may be made to any patient who grants permission. Patients may not be
"borrowed" from another agency for initial survey purposes.
D. Provide the HHA with a form HCFA-855 enrollment application to be
completed and returned to you. Use the May 1997 version of the 855 at this time. (A new
version (January 1998) will receive OMB approval in the near future.)
E. Inform the HHA that it must submit to you a copy of a surety bond in
the amount of $50,000 naming HCFA as the obligee for the Medicare program. The bond
effective date can be the date the provider agreement is effective. You may accept from an
HHA that is part of a chain organization a bond that covers all of the chain's agencies.
In that case, simply check the list of agencies named on the bond to be sure that it
specifically includes the applicant HHA. Direct applicant HHAs to the RHHI for further
details regarding surety bond requirements.
Government HHAs (Federal, State, Local or Tribal) are generally exempt
from the bond requirement. Rather than submitting a bond, a new governmental HHA can
submit a statement that it is exempt from the requirement. The RHHI will then determine if
it is exempt. If it is not, the RHHI will inform the agency that it has 60 days to obtain
a bond.
F. Inform the HHA that if it wishes to participate in the Medicaid
program, it must submit to you a copy of a surety bond in the amount of $50,000 naming the
Medicaid State agency as the obligee for the Medicaid program. This is a second bond which
is required in addition to the Medicare bond for HHAs wishing Medicaid participation. You
should forward this second bond to the Medicaid State agency.
G. Inform the HHA that when it returns its application materials to
you, it must include the following information that the RHHI will use to calculate the
minimum capitalization requirements:
1. The agency's full address, including the addresses of any proposed
branches and subunits.
2. Is the HHA is free-standing or provider-based? Does it anticipate
filing a consolidated cost report with other providers?
3. Is the agency proprietary or nonproprietary?
4. The HHA's projected number and type (skilled nursing, physical
therapy, etc.) of visits for the first three months of operation.
5. The HHA's projected number and type of visits for the first year
of operation.
6. Any additional information which will enable the enrolling RHHI to
properly compare the applying HHA with other similarly situated and sized HHAs that the
RHHI services.
The RHHI will use this information to compare the applicant HHA to
currently participating HHAs and calculate how much capital the applicant must have
available. The RHHI will inform the HHA of what it needs. The HHA will then need to
respond to the RHHI with the necessary information (such as bank statements, an
attestation from the bank, etc.).
H. Inform the applicant HHA that no action of any kind will take
place on its request to participate until you receive all the above items.
I. Inform the applicant that you will not conduct an onsite
survey until the RHHI has confirmed that the applicant HHA has a surety bond from a surety
company approved by the Department of the Treasury and the enrollment and capitalization
information has been verified.
J. Inform the applicant HHA that due to evolving procedures, the RHHI
may need to collect further information at a later date under its enrollment (HCFA-855)
review. Also, the RHHI may require the HHA to again submit proof of adequate
capitalization if a lengthy period of time has passed after its first review.
Forward the completed enrollment application, surety bond, and
capitalization information to the HHA's assigned RHHI for verification. Schedule a
survey only after the RHHI has informed you of its clearance. If you receive a
denial of any type from the RHHI, forward the case and materials from the RHHI to the
Regional Office and notify the applicant that you cannot schedule a survey due to a denial
from the RHHI.
Refer all inquiries regarding the Medicaid surety bond to your
Medicaid State Agency. Refer to the RHHI all questions regarding the details of the
HCFA-855, the Medicare surety bond and the initial capitalization requirements. Similarly,
refer inquiries regarding the status of the RHHI's processing to the RHHI at the telephone
numbers noted below.
The RHHI for Minnesota, Wisconsin and Michigan is:
United Government Services
1515 North River Center Drive
P.O. Box 2019
Milwaukee, Wisconsin 53201-2019
Telephone: (414) 226-6972
E-mail: JohnS@UWSI.com
The RHHI for Illinois, Indiana and Ohio is:
Health Care Service Corporation
300 East Randolph Street
Chicago, Illinois 60601
Telephone: (312) 653-7798 or: (312) 653-7812
(Health Care Service Corporation will transition out of this role in
the near future; we will inform you about the new RHHI when that occurs.)
After completion of the survey, forward the complete initial survey
package to our Regional Office. Include the following items:
The letter or memo from the RHHI in which they indicate their clearance
of the HHA.
A copy of the HCFA-855. Submit only the completed portions of the form,
not the pages containing only instructions.
Do not forward the bond or any other materials to the RO. However, you
should maintain these materials in your files.
In a simplified schematic form, the process is as follows:
HHA--->full application package--->survey agency--->RHHI
RHHI--->specific capitalization proof request--->HHA
HHA--->capitalization response--->RHHI
RHHI--->clearance--->survey agency--->survey--->RO
RO--->provider agreement--->HHA.
We will keep you informed of any changes in this process. If you have
any questions regarding this, please contact your Program Representative.
Charles Bennett, Branch Manager
Survey and Certification Program
Coordination and Improvement
Division of Medicaid and State Operations
Last Updated: March 17, 2011 |
