Oregon Patient Trust Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain an Oregon Patient Trust bond
At a Glance:
- Lowest Cost: 0.75% of the bond amount per year based on the applicant’s credit
- Bond Amount: Determined on a case by case basis (more on this later)
- Who Needs it: All Oregon nursing facilities that manage residents’ funds
- Purpose: To ensure that residents will receive compensation for financial harm if the nursing facility mismanages their funds
- Who Regulates Nursing Facilities in Oregon: The Oregon Department of Human Services
Background
Oregon Sstatute 411-085-0010 requires all nursing facilities operating in the state to obtain a license with the Department of Human Services. The Oregon legislature enacted the licensing laws and regulations to ensure that nursing facilities engage in ethical business practices. To provide financial security for the enforcement of the licensing law, nursing facilities that manage resident funds must purchase and maintain a surety bond to be eligible for licensure. 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 Oregon Patient Trust Bond?
Oregon requires nursing facilities that manage resident funds to purchase a surety bond as a prerequisite to obtaining a business license. The bond ensures that residents will receive compensation for financial harm if the facility fails to abide by the regulations outlined in Oregon statute 411-085-0350. Specifically, the bond protects residents if the nursing facility in any way mismanages their funds. In short, the bond is a type of insurance that protects residents if the nursing facility acts unethically with their money.
How Can an Insurance Agent Obtain an Oregon Patient Trust Bond?
BondExchange makes obtaining an Oregon Patient Trust bond easy. Simply log in to your account and use our keyword search to find the “trust” bond in our database. Don’t have a login? Gain access 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.
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How is the Limit Determined on the Oregon Patient Trust Bond?
Oregon statute 411-085-0350 dictates that the bond must be in an amount large enough to cover the maximum number of resident funds held by the facility, including all petty cash, in the previous 12 months. Initial license applicants should contact the Department of Human Services for assistance determining their required bond amount.
Is a Credit Check Required for the Oregon Patient Trust Bond?
Surety companies will run a credit check on the owners of the nursing facility to determine eligibility and pricing for the Oregon Patient Trust 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 Oregon Patient Trust Bond Cost?
The Oregon Patient Trust 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 Oregon Patient Trust Bond Cost
| Credit Score | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 720+ | $150 | $15 |
| 625 – 719 | $200 | $20 |
| 600 – 624 | $500 | $50 |
| 575 – 599 | $600 | $60 |
| 550 – 574 | $1,000 | $100 |
| 500 – 549 | $1,400 | $140 |
*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 Oregon Patient Trust Bond?
Oregon requires all nursing facilities that hold resident funds to purchase a surety bond prior to obtaining a business license. To paraphrase Oregon statute 411-085-0005, a nursing facility is an establishment that provides medical and nursing services to two or more unrelated residents.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How Do Nursing Facilities Apply for a License in Oregon?
Nursing facilities in Oregon must navigate several steps to obtain a license. Below are the general guidelines, but applicants should refer to the application form for details on the process.
License Period – All Oregon Nursing Facility Licenses are valid for one year from the date of issuance and must be renewed before the expiration date
Step 1 – Obtain a Certificate of Need
Nursing facilities that are newly constructed, expanded or offering new services are required to obtain a Certificate of Need (CON) prior to applying for a business license. The CON states that Oregon has a need for the applicant’s facility and that the opening of the facility will not cause healthcare costs to rapidly increase in the state.
To obtain a CON, nursing facilities must submit a letter of intent, followed by a CON application that includes all required documents, to the following address:
Certificate of Need Program
Health Care Regulation and Quality Improvement Program
800 NE Oregon Street, Suite 465
Portland, OR 97232
Nursing facilities may apply for licensure after obtaining a CON.
Step 2 – Purchase a Surety Bond
Nursing facilities that hold resident funds must purchase and maintain a surety bond
Step 3 – Purchase Insurance
Oregon requires nursing facilities with employees to purchase worker’s compensation insurance
Step 4 – Complete the Application
All Oregon Nursing Facility License applications should be emailed to [email protected] or mailed to the following address:
Attn: Nursing Facility Licensing Policy Analyst
DHS Office Safety, Oversight and Quality (SOQ)
PO Box 14530
Salem, OR 97309
Nursing facilities must complete the application in its entirety, and submit the following items:
-
- Credit check authorization form for each individual owning 10% or more of the facility
- Provider ownership and control interest statement
- Memory care application form (if applicable)
- Ventilator assisted unit endorsement application (if applicable)
- Floor plan of the facility
Specialized nursing facility application forms (change of ownership, capacity increase, etc.) can be found here. A separate application must be submitted for the owner of the facility and operator. Only one application is required if the owner/operator is the same individual.
Step 5 – Pay Fees
Nursing facilities must pay the following fees when submitting their license application.
| Number of Beds | Required Fee |
|---|---|
| 1 – 15 | $1,000 |
| 16 – 49 | $1,500 |
| 50 – 99 | $2,000 |
| 100 – 150 | $2,500 |
| 151+ | $3,000 |
Nursing facilities must pay the following additional fees when applying for a memory care community endorsement.
| Number of Beds | Required Fee |
|---|---|
| 1 – 16 | $50 |
| 17 – 50 | $75 |
| 51+ | $100 |
Step 6 – Enroll of a Medicare/Medicaid Provider
Nursing facilities seeking to enroll as Medicare and/or Medicaid providers can do so by completing the steps located in the below application guidelines.
How do Oregon Nursing Facilities Renew Their License?
Nursing facilities should email their completed renewal application, including all required documents and fees, to [email protected]. Nursing facilities can mail their renewal application to the following address if they do not wish to submit their application via email.
Attn: Nursing Facility Licensing Policy Analyst
DHS Office Safety, Oversight and Quality (SOQ)
PO Box 14530
Salem, OR 97309
All Oregon Nursing Facility Licenses are valid for one year from the date of issuance and must be renewed before the expiration date.
What are the Insurance Requirements for Nursing Facilities in Oregon?
Oregon requires all nursing facilities with employees to purchase workers’ compensation insurance. Nursing facilities that hold resident funds must purchase and maintain a surety bond in an amount large enough to cover the maximum number of resident funds held by the facility, including all petty cash, in the previous 12 months. Initial license applicants should contact the Department of Human Services for assistance determining their required bond amount.
How Do Oregon Nursing Facilities File Their Bond?
Nursing facilities should submit their completed bond form, including the power of attorney, via email to [email protected] or mail it to the following address:
Attn: Nursing Facility Licensing Policy Analyst
DHS Office Safety, Oversight and Quality (SOQ)
PO Box 14530
Salem, OR 97309
The surety bond requires signatures from both the surety company that issues the bond and from a representative of the nursing facility. 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 state of incorporation
- Bond amount
- Date the bond goes into effect
- Date the bond is signed
What Can Oregon Nursing Facilities Do to Avoid Claims Against Their Bond?
To avoid claims on their bond, nursing facilities in Oregon must ensure that they:
- 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 Facilities in Oregon?
Oregon does not require nursing facilities to purchase any form of liability insurance as a prerequisite to obtaining a business license. 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 Oregon Nursing Facility Customers?
Oregon conveniently provides a public database to search for active nursing facilities 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.