Surety bond deadline to be extended

It almost took an act of Congress, but the deadline for posting surety bonds has been extended, thereby preventing approximately half of the nation's Medicare-certified home health providers from going out of business.

Yielding to pressure from Congress and intense lobbying from both the home health and surety industries, the Health Care Financing Administration (HCFA) on Feb. 13 said the original Feb. 27 deadline would be extended to give HCFA time to make "technical revisions."

In a letter to Congress, HCFA Administrator Nancy-Ann Min DeParle wrote, "These technical issues will be detailed in a Federal Register notice to be published shortly about our intent to amend the regulation. They are in keeping with standard industry practice and would help surety companies offer bonds at more affordable prices to agencies by providing a more precise and more limited time frame for which bond writers are liable and by giving bond writers appeal rights. There will be a 30-day comment period on this Federal Register notice."

Few, if any, agencies would have been able to post surety bonds under the previous terms of the rule published by HCFA Jan. 5, 1998. Min DeParle said changes "should help smaller, reputable agencies, such as nonprofit visiting nurse associations, obtain bonds without weakening the bond requirement's ability to block out agencies that should not be billing Medicare."

Min DeParle went on to say, "The comments on this Federal Register notice and the comments on the original regulation published Jan. 5, 1998, will form the basis for a final rule. We intend to proceed expeditiously as soon as all comments are received to make whatever changes are necessary in this important regulation so that it can protect Medicare without unduly burdening reputable providers. . . . Home health agencies will be given 60 days from the date the final regulation is published to submit a surety bond."

Agencies that already purchased surety bonds should submit proof to the Fiscal Intermediary by the Feb. 27 deadline, while those that have been unable to obtain bonds should notify the intermediary by that date, the new HCFA chief said.

The surety bond requirement only applies to hospices if they are also dually certified as home health agencies. n

What is the penetration rate in the dying population for hospice services? How great is hospice's impact on terminal care overall? Recent commentators have cited a figure of hospice utilization as 15% - or one-seventh - of the over two million Americans who die annually, based on the National Hospice Organization (NHO) tally of 390,000 hospice patients in 1995. (NHO estimates for 1996 suggest that hospices served 450,000 patients, or one in five dying Americans.)

However, David Abrams, Miami Beach, FL-based senior vice president for the Hospice Foun da tion of America, says these estimates understate hospice's true contribution. The figure for total deaths includes many cases "for which hospice was neither possible nor appropriate," he explains.

The CDC's National Center for Health Statistics tallied 2,312,132 deaths in the United States from all causes in 1995. Abrams says non-hospice-qualifying causes such as homicides, suicides, accidents, and other external causes, and certain infectious diseases such as pneumonia and influenza, need to be factored out of the hospice penetration equation.

When that is done, he says, only 1,733,843 deaths were even remotely eligible for hospice in 1995. Thus, hospices cared for 22.5% of all dying patients who were theoretically eligible for hospice. This is a higher penetration rate than the industry's critics have been willing to give hospice credit for.