Medicaid Provider ($50,000) Bond - Statewide in Texas

Brief Summary

Most Texas Medicaid providers do not need this bond. It lands on two groups: durable medical equipment providers, and ambulance providers that are not directly operated by a government entity, in both cases when newly enrolling or re-enrolling. HHSC can also impose it on any provider it flags for fraud, waste or abuse history. Two things people get wrong. The $50,000 is a minimum, not a set figure, and it is required for each enrolled location, so a three location DME operation files three bonds. And your Medicare DMEPOS bond does not count.

Texas Medicaid does not require a surety bond of every enrolled provider. Under 1 TAC 352.15 a bond may be required for each enrolled location where a provider or provider type has been identified by federal or state agencies as having a significant history of, or potential for, fraud, waste, or abuse, or where HHSC in its sole discretion determines the provider is subject to the requirement. In practice HHSC applies it to all newly enrolling and re-enrolling durable medical equipment providers and to ambulance providers not directly operated by a governmental entity. The amount of the surety bond must be no less than $50,000, HHSC is the sole obligee, and the bond must be filed on the State of Texas Medicaid Provider Surety Bond Form, F00092.

We can help with all Texas bonds!

How to Apply for a Medicaid Provider ($50,000) Bond:

• Confirm the bond actually applies to you. HHSC requires it of newly enrolling and re-enrolling DME providers and of ambulance providers not directly operated by a governmental entity, and can impose it on any provider under 1 TAC 352.15(a).
• Count your enrolled locations. A bond of no less than $50,000 is required for each enrolled location.
• Check your enrollment correspondence for the amount. $50,000 is the minimum in the rule, not a ceiling.
• Legal provider name exactly as it appears on the enrollment application, with the correct NPI and location address.
• Owner or principal information and authorization for a credit review.
• Complete the bond application, review the quoted premium, and pay it.
• Have the bond issued on the State of Texas Medicaid Provider Surety Bond Form, F00092. No other form is accepted.
• Confirm the bond is continuous and written for a 12 month term. An annual bond with a fixed expiration date is rejected.
• Set the effective date no later than the date you submit the enrollment application, and no earlier than 12 months before it.
• Confirm your surety is licensed by the Texas Department of Insurance and holds a current U.S. Treasury Certificate of Authority.
• Do not submit your Medicare DMEPOS bond. A bond naming CMS as obligee does not satisfy Texas Medicaid.
• Diary the expiration and upload proof of continuation beforehand by initiating a Maintenance Practice Location Surety Bond Request in PEMS.

Detailed Information About the Texas Medicaid Provider ($50,000) Bond:

Check whether it applies to you at all

The page this one replaced said Texas Medicaid providers must obtain a $50,000 bond. That is not how the rule works, and starting there wastes money for most of the people who read it.

1 TAC 352.15(a) makes the bond conditional. A surety bond may be required for each enrolled location if a provider or type of provider has been identified by federal or state agencies to have a significant history of, or potential for, fraud, waste, or abuse, or if HHSC, in its sole discretion, has determined that a provider will be subject to the requirement. That second door covers conduct such as falsifying information or any material misrepresentation.

HHSC has used the first door to designate two provider types outright. The Texas Medicaid Provider Procedures Manual states that all newly enrolling and re-enrolling DME and nongovernment-operated ambulance providers must obtain a surety bond as a condition of enrollment and continued participation.

So if you are a physician group, a home health agency, a behavioral health provider or a pharmacy, and nobody at HHSC has told you otherwise, this bond is very likely not yours. If you are DME or private ambulance, it is.

$50,000 is the floor, and it is per location

Both halves of that sentence catch people out.

The rule says the amount of the surety bond must be no less than $50,000. The manual repeats it as a bond in an amount of no less than $50,000 for each enrolled location. Neither says $50,000 flat. HHSC can set a higher figure, so read your enrollment correspondence rather than assuming the minimum.

And per enrolled location means what it says. A DME company operating out of four addresses enrolled separately files four bonds, not one bond covering the company. Count your enrolled locations before you get a quote, because the number changes the premium by a factor of four in that example.

Your Medicare bond does not carry over

This is the single most expensive assumption a DMEPOS supplier makes here.

Medicare requires DMEPOS suppliers to post a $50,000 surety bond per NPI under 42 CFR 424.57(d), and that bond names the Centers for Medicare and Medicaid Services as obligee. The Texas manual addresses it directly: surety bonds obtained for the purpose of accreditation in the Medicare program, which list CMS as obligee, do not fulfill the surety bond requirement for Texas Medicaid.

Same amount, different obligee, two separate bonds. There is no credit for holding one when you need the other.

The form is prescribed and substitutions are refused

Use the State of Texas Medicaid Provider Surety Bond Form, numbered F00092. The manual is unambiguous that no other form will be accepted, because that form designates HHSC as the sole obligee.

A surety's own general form, however well drafted, gets returned. If your agent offers to issue on their standard paper, stop them.

Continuous, twelve month term, and the date window

Three mechanical requirements that cause more rejections than anything else in this filing.

The bond must be issued for a term of 12 months. Bonds for longer or shorter terms are not acceptable.

The bond must be a continuous bond, meaning it remains in full force and effect from term to term unless it is canceled. An annual bond that specifies effective and expiration dates is not acceptable. Those two requirements sit together and confuse people, because a twelve month term on a continuous bond is a renewal cycle rather than a hard stop.

The effective date must be no later than the date the provider enrollment application is submitted, and no earlier than 12 months before that date. Getting the bond written months in advance of filing can put you outside that window.

Keeping it in force

Under 352.15(b), a provider required to hold a bond must maintain a current one to continue participation in Medicaid or CHIP, and reimbursement is withheld for any period the bond is not current. That is the practical consequence of letting it lapse, and it happens before anybody calls you about it.

Renewal is handled by uploading proof of continuation before the expiration date, initiated as a Maintenance Practice Location Surety Bond Request in PEMS, the Provider Enrollment and Management System.

Who is exempt

Two exemptions, and they are narrower than they sound.

Under 352.15(d), an entity operated or administered by a federal, state, local, or tribal government agency is exempt from subsection (a), but only if it has had no uncollected overpayments in the preceding five years. The clean history condition is part of the exemption, not a footnote to it.

Separately, the manual states that ambulance providers directly operated by a governmental entity are exempt from the surety bond requirement. A private ambulance company under contract to a city is not directly operated by it, and reading the exemption that way is a mistake worth avoiding.

The liability tail

Worth knowing before you cancel anything.

The surety stays liable for uncollected overpayments determined to have occurred during the term of the bond, regardless of when the overpayments are discovered. Under 352.15(g)(2), where a provider fails to renew, the surety remains liable for an additional two years after the date of expiration of the bond.

That liability cannot be shut off by the provider going bankrupt, selling its assets or ceasing operations. Terminating it takes thirty days written notice or a replacement bond that meets every requirement of the rule.

The surety itself

The writing company has to be licensed by the Texas Department of Insurance and hold a valid Certificate of Authority with the United States Department of the Treasury. Both, not either. The bond names the provider as Principal, HHSC as Obligee, and the surety company as Surety, with effective and expiration dates shown.

Eligibility and Requirements for a Texas Medicaid Provider ($50,000) Bond:

• A surety bond of no less than $50,000 under 1 TAC 352.15(f).
• One bond for each enrolled location.
• The State of Texas Medicaid Provider Surety Bond Form, F00092. No other form will be accepted.
• HHSC named as sole obligee, the provider named as Principal, and the surety company named as Surety.
• A surety licensed by the Texas Department of Insurance and holding a valid Certificate of Authority with the United States Department of the Treasury.
• A 12 month term. Longer or shorter terms are not acceptable.
• A continuous bond that remains in force from term to term unless canceled.
• An effective date no later than the enrollment application submission date and no earlier than 12 months before it.
• Proof of continuation submitted through PEMS before each expiration date.
• Provider name on the bond matching the enrollment application exactly.

Texas Medicaid Provider ($50,000) Bond FAQs:

Official and Additional Resources for the Texas Medicaid Provider ($50,000) Bond: