I
106TH CONGRESS
1ST SESSION
H. R. 2325
To amend titles XVIII and XIX of the Social Security Act with respect
to changing the requirements for surety bonds of home health agencies,
durable medical equipment suppliers, and others under the Medicare
and Medicaid Programs.
IN THE HOUSE OF REPRESENTATIVES
JUNE 23, 1999
Mr. STARK (for himself and Mrs. THURMAN) introduced the following bill;
which was referred to the Committee on Ways and Means, and in addi-
tion to the Committee on Commerce, for a period to be subsequently de-
termined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
A BILL
To amend titles XVIII and XIX of the Social Security Act
with respect to changing the requirements for surety
bonds of home health agencies, durable medical equip-
ment suppliers, and others under the Medicare and Med-
icaid Programs.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Medicare and Medicaid
Surety Bond Reform Act of 1999’’.
SEC. 2. CHANGES IN MEDICARE SURETY BOND REQUIRE-
MENTS.
(a) HOME HEALTH AGENCIES.—Section 1861(o)(7)
of the Social Security Act (42 U.S.C. 1395x(o)(7)) is
amended—
(1) by striking ‘‘on a continuing basis’’ and in-
serting ‘‘for the first 2 years of the agency’s or orga-
nization’s participation in the program under this
title or title XIX’’; and
(2) by striking ‘‘in an amount that is not less
than $50,000’’ and inserting ‘‘in the amount of
$50,000’’.
(b) DURABLE MEDICAL EQUIPMENT SUPPLIERS.—
Section 1834(a)(16)(B) of the Social Security Act (42
U.S.C. 1395m(a)(16)(B)) is amended—
(1) by striking ‘‘in an amount that is not less
than $50,000’’ and inserting ‘‘in the amount of
$50,000 for the first 2 years of the supplier’s par-
ticipation in the program under this title or under
title XIX, except that the requirement for a surety
bond shall not apply to an angioplastologist and an
entity that supplies only orthotics and prosthetics’’.
(c) APPLICATION TO OTHER PROVIDERS.—
(1) 
REHABILITATION
CLINICS.—Section
1861(p)(4)(A)(v) 
of 
such 
Act 
(42 
U.S.C.
1395x(p)(4)(A)(v)) is amended—
(A) by striking ‘‘on a continuing basis’’
and inserting ‘‘for the first 2 years of the agen-
cy’s participation in the program under this
title or title XIX’’; and
(B) by striking ‘‘in an amount that is not
less than $50,000’’ and inserting ‘‘in the
amount of $50,000’’.
(2) COMPREHENSIVE OUTPATIENT REHABILITA-
TION
FACILITIES.—Section 1861(cc)(2)(I) of such
Act (42 U.S.C. 1395x(cc)(2)(I)) is amended—
(A) by striking ‘‘on a continuing basis’’
and inserting ‘‘for the first 2 years of the facili-
ty’s participation in the program under this
title or title XIX’’; and
(B) by striking ‘‘in an amount that is not
less than $50,000’’ and inserting ‘‘in the
amount of $50,000’’.
(3) OPTIONAL COVERAGE FOR PROVIDERS OF
SERVICES.—Section 1866(a)(1) of such Act (42
U.S.C. 1395cc(a)(1)) is amended—
(A) in subparagraph (R), by adding a
semicolon at the end;
(B) by striking the period at the end of
subparagraph (S) and inserting ‘‘; and’’;
(C) by inserting after subparagraph (S)
the following new subparagraph:
‘‘(T) in the case of hospitals, skilled nursing fa-
cilities, and hospice programs and to the extent pro-
vided in regulations, to provide the Secretary for the
first 2 years of the provider’s participation in the
program under this title or title XIX with a surety
bond in a form specified by the Secretary and in the
amount of $50,000.’’; and
(D) by adding at the end the following new
sentence: ‘‘The Secretary may waive the re-
quirement of a surety bond under subparagraph
(T) in the case of a provider that provides a
comparable surety bond under State law.’’.
(d) COORDINATION OF SURETY BONDS.—Part A of
title XI of the Social Security Act is amended by adding
at the end the following new section:
‘‘COORDINATION OF MEDICARE AND MEDICAID SURETY
BOND PROVISIONS
‘‘SEC. 1148. In the case of a home health agency,
durable medical equipment supplier, or other entity that
is subject to a surety bond under title XVIII and title
XIX, the surety bond provided to satisfy the requirement
under one such title shall satisfy the requirement under
the other such title so long as the bond applies to guar-
antee return of overpayments under both such titles.’’.
SEC. 3. CHANGES IN MEDICAID SURETY BOND REQUIRE-
MENTS.
(a) HOME HEALTH AGENCIES.—Section 1903(i)(18)
of the Social Security Act (42 U.S.C. 1396b(i)(18)) is
amended by striking ‘‘in a form specified by the Secretary
under paragraph (7) of section 1861(o) and in an amount
that is not less than $50,000’’ and inserting ‘‘in a form
and amount described in paragraph (7) of section
1861(o)’’.
(b) DURABLE MEDICAL EQUIPMENT SUPPLIERS.—
Section 
1902(a)(65)(B) 
of 
such 
Act 
(42 
U.S.C.
1396a(a)(65)(B)) is amended by striking ‘‘a surety bond
in a form specified by the Secretary under section
1834(a)(16)(B) and in an amount that is not less than
$50,000 or’’ and inserting ‘‘except as exempted under sec-
tion 1834(a)(16)(B), a surety bond in a form and amount
described in such section’’.
(c) OTHER PROVIDERS.—Section 1903(i)(18) of such
Act (42 U.S.C. 1396b(i)(18)) is amended—
(1) by inserting ‘‘(A)’’ after ‘‘(18)’’; and
(2) by inserting before the semicolon at the end
the following: ‘‘, or (B) with respect to any amount
expended for items or services provided by a pro-
vider of services described in subparagraph (T) of
section 1866(a)(1) unless the provider provides the
State agency a surety bond in a form and amount