Montana Nursing Home Bond: A Comprehensive Guide

January 18, 2022

Montana Nursing Home Bond

This guide provides information for insurance agents to help their customers obtain a Montana Nursing Home bond

At a Glance:

  • Average Cost: Between 0.75% to 7% of the bond amount per year based on the applicant’s credit
  • Bond Amount: Greater than or equal to all funds held by the facility at any given time
  • Who Needs it: All Montana nursing homes that are enrolled Medicaid providers and hold residents’ funds
  • Purpose: To ensure that residents will receive compensation for financial harm if the nursing home mismanages their funds
  • Who Regulates Nursing Homes in Montana: The Montana Department of Public Health and Human Services

Background

Montana statute 37.85.402 requires all nursing homes that receive Medicaid payments to enroll as a provider with the DPHHS. The Montana legislature enacted the enrollment requirement to ensure that eligible nursing homes receive compensation for services that are covered by Medicaid. To ensure residents are not taken advantage of, nursing homes that hold residents’ funds must purchase and maintain a surety bond to be eligible to receive Medicaid payments. Additionally, federal statute 483.10 requires all long-term care facilities that hold resident funds in a trust account to purchase a surety bond or other similar form of security. However, the federal regulation leaves the implementation and enforcement of this requirement to individual states.

What is the Purpose of the Montana Nursing Home Bond?

Montana requires nursing homes that manage resident funds to purchase a surety bond before enrolling as a Medicaid provider. The bond ensures that residents will receive compensation for financial harm if the nursing home fails to abide by the regulations outlined in federal statute 483.10. Specifically, the bond protects residents if the nursing home in any way mismanages their funds. In short, the bond is a type of insurance that protects residents if the nursing home acts unethically with their money.

Montana Nursing Home Bond Form

Montana Nursing Home Bond Form

How Can an Insurance Agent Obtain a Montana Nursing Home Surety Bond?

BondExchange makes obtaining a Montana Nursing Home bond easy. Simply log in to your account and use our keyword search to find the “nursing home” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

Is a Credit Check Required for the Montana Nursing Home Bond?

Surety companies will run a credit check on the owners of the nursing home to determine eligibility and pricing for the Montana Nursing Home bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.

How Much Does the Montana Nursing Home Bond Cost?

The Montana Nursing Home bond can cost anywhere between 0.75% to 7% of the bond amount per year. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below offers a quick reference for the bond cost on a $20,000 bond requirement.

$20,000 Nursing Home Bond Cost

Credit Score Bond Cost (1 year)
750+ $150
625 – 749 $200
600 – 624 $500
575 – 599 $600
550 – 574 $1,000
500 – 549 $1,400

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

Who is Required to Purchase the Bond?

Montana requires all nursing homes that hold residents’ funds to purchase a surety bond prior to enrolling as a Medicaid provider. To paraphrase Montana statute 50-5-101, a nursing home is any facility that provides nursing care, health-related, and social services under the supervision of a licensed or licensed registered nurse to residents that may or may not require 24-hour nursing care.

How Do Nursing Homes Enroll as a Medicaid Provider in Montana?

Nursing homes in Montana must navigate several steps when enrolling as Medicaid providers. Below are the general guidelines, but applicants should refer to the enrollment guide for details on the process.

Step 1 – Obtain a Long-Term Care Facility License

Nursing homes must obtain a Long-Term Care Facility License prior to enrolling as a Medicaid provider. To obtain a Long-Term Care Facility License, nursing homes must mail their completed application to the following address:

Montana Department of Public Health and Human Services
Office of Inspector General – Licensure Bureau
2401 Colonial Drive
P.O. Box 202953
Helena, MT 59620-2953

Nursing homes must complete the application in its entirety, and submit the following items:

    • Floor plan containing the sizes of all rooms and spaces used by residents
    • Local building code approval (newly constructed facilities must submit a Certificate of Occupancy)
    • The facility’s policies and procedures
    • The facility’s fire inspection report
    • $20 application fee plus an additional $1 for every bed past the facility’s first 20

Nursing homes seeking to initiate or expand their services may need to obtain a Certificate of Need prior to submitting their license application.

License Period – All Montana Long-Term Care Facility Licenses are valid for three years from the date of issuance and must be renewed before the expiration date

Step 2 – Enroll as a Medicaid Provider

After obtaining their Long-Term Care Facility License, nursing homes can proceed to enroll as Medicaid providers. All Medicaid provider enrollment applications can be completed online here. Prior to submitting their provider application, nursing homes must obtain a National Provider Identifier (NPI) number from the National Plan and Provider Enumeration System. Additionally, nursing homes must pay a $631 enrollment fee when submitting their application.

Enrollment Period – Nursing homes must revalidate their Medicaid provider enrollment a minimum of once every 5 years. However, most nursing homes will have to revalidate their enrollment every 3½ years.

Step 3 – Purchase a Surety Bond

Nursing homes that hold residents’ funds and receive Medicaid payments must purchase and maintain a surety bond in an amount that is greater than or equal to all funds held by the facility at any given time

How do Montana Nursing Homes Renew Their License and Provider Enrollment?

Prior to the expiration date, the DPHHS will contact the nursing home with instructions on how to renew their Long-Term Care Facility License. All Montana Long-Term Care Facility Licenses are valid for three years from the date of issuance and must be renewed before the expiration date. Additionally, nursing homes will be sent instructions on how to revalidate their enrollment a minimum of 60 days prior to the expiration date. Nursing homes must revalidate their Medicaid provider enrollment a minimum of once every 5 years. However, most nursing homes will have to revalidate their enrollment every 3½ years.

What are the Insurance Requirements for Nursing Homes in Montana?

Montana does not require nursing homes to obtain any form of liability insurance as a prerequisite to obtaining a business license or Medicaid enrollment. Nursing homes that manage residents’ funds and receive Medicaid payments must purchase and maintain a surety bond in an amount greater than or equal to the highest daily balance of all resident funds held on deposit. First-time enrollment applicants must use their estimated balance when determining the required bond amount.

How Do Montana Nursing Homes File Their Bond?

Nursing homes should mail their completed bond form, including the power of attorney, to the following address:

Bureau Chief of the Nursing Facility Services Bureau
Senior and Long-Term Care Division
Montana Department of Public Health and Human Services
P.O. Box 4210
Helena, Montana 59604

The surety bond requires signatures from both the surety company that issues the bond and from a representative of the nursing home. The surety company should include the following information on the bond form:

  • Legal name and address of entity/individual(s) buying the bond
  • Surety company’s name and address
  • Bond amount
  • Date the bond is signed

What Can Montana Nursing Homes Do to Avoid Claims Against Their Bond?

To avoid claims on their bond, nursing homes in Montana must ensure that they:

  • Make sure all resident funds are safe and secure
  • Hold all resident funds in a designated trust account
  • Administer all resident funds in a lawful manner
  • Accurately report on all resident funds
  • Refund all resident funds upon the termination of a deposit

What Other Insurance Products Can Agents Offer Nursing Homes in Montana?

Montana does not require nursing homes to purchase any form of liability insurance as a prerequisite to obtaining a business license or enrolling as a Medicaid provider. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Montana Nursing Home Customers?

Montana conveniently provides a public database to search for active nursing homes in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

2022-03-14T16:23:40-04:00