Surety Bond Encyclopedia

Patients Trust Fund Bond - Mclean Patients Fund Trust in Connecticut

Brief Summary

A patients trust fund bond is how a nursing facility shows that every dollar residents leave in its care is protected. For McLean, a surety bond meets the federal security requirement without setting aside a separate reserve, and it can be resized as the balance of resident accounts changes.

This bond secures the personal funds that residents of McLean, the nonprofit senior living community at 75 Great Pond Road in Simsbury, deposit with its health center. Federal nursing home rules require a facility to purchase a surety bond, or provide other assurance satisfactory to the Secretary of Health and Human Services, covering all resident personal funds it holds.

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How to Apply for a Patients Trust Fund Bond:

Confirm the total resident personal funds currently held, including any refundable deposits.
Get the required obligee wording and bond form from McLean's business office.
Provide the facility's legal entity name and address exactly as licensed.
Submit recent financial statements and trust account records to the surety.
Review the bond amount whenever resident account balances change materially.

Detailed Information About the Connecticut Patients Trust Fund Bond:

The bond has to cover every dollar held

The most common mistake with this bond is sizing it once and forgetting it. Under 42 CFR 483.10(f)(10)(vi), a long term care facility must purchase a surety bond, or otherwise provide assurance satisfactory to the Secretary, to secure all personal funds residents deposit with it. CMS guidance in memo S&C-04-17 states that any resident funds entrusted to the facility must be covered by the surety bond, and that refundable deposits treated as resident funds must be covered too. As balances grow, the bond amount should be reviewed.

What Connecticut adds

Connecticut General Statutes section 19a-551, as amended by Public Act 15-130, governs how a nursing home handles residents' money. The facility must give each resident a written statement of rights over personal funds at admission, keep either separate accounts for each resident or an aggregate trust account, keep itemized records with quarterly accountings, and notify Medicaid recipients when a balance comes within $200 of the Medicaid eligibility limit. Overpayments and deposits owed to a former resident must be refunded within thirty days of discharge, and late refunds carry interest at ten percent a year.

Who is on the bond

McLean Health Center, the skilled nursing center operated by McLean in Simsbury, holds the resident funds this bond protects. The bond amount, the exact obligee wording and the form come from the arrangement McLean has in place. Confirm those details with McLean's business office before the bond is issued.

Eligibility and Requirements for a Connecticut Patients Trust Fund Bond:

Coverage of all resident personal funds deposited with the facility, per 42 CFR 483.10(f)(10)(vi).
Separate resident accounts or an aggregate trust account under C.G.S. 19a-551.
Itemized records and quarterly accountings available to residents or their representatives.
Refund of former residents' balances within thirty days of discharge.
Underwriting of the facility's financial statements and internal controls over resident funds, which drives the premium.

Connecticut Patients Trust Fund Bond FAQs:

How large does the bond need to be?

Large enough to cover all resident personal funds the facility holds. CMS guidance says any resident funds entrusted to the facility must be covered, including refundable deposits that remain resident funds. Confirm the current figure with McLean's business office.

Is a bond the only option?

Federal rules allow a surety bond or other assurance satisfactory to the Secretary of Health and Human Services. A surety bond is the most common way facilities meet the requirement.

What does the bond protect against?

Loss of residents' deposited personal funds through misappropriation or failure to account for them. It does not cover the facility's general operating obligations.

What Connecticut rules apply to the trust account itself?

C.G.S. 19a-551 requires separate or aggregate trust accounts, signed receipts, itemized records with quarterly accountings, Medicaid balance notices and refunds to former residents within thirty days.