Wisconsin Resident Fund Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a Wisconsin Resident Fund bond
At a Glance:
- Lowest Cost: 0.75% of the bond amount per year based on the applicant’s credit
- Bond Amount: Greater than or equal to all resident funds held by the nursing home at any given time
- Who Needs it: All Wisconsin nursing homes that manage residents’ funds and receive Medicaid payments
- Purpose: To ensure that residents will receive compensation for financial harm if the nursing home acts unethically with their money
- Who Regulates Nursing Homes in Wisconsin: The Wisconsin Department of Health Services (DHS)
Background
Wisconsin Administrative Code Chapter DHS 105 requires all nursing homes that receive Medicaid payments to become certified with the DHS. The Wisconsin legislature enacted the certification requirement to ensure that eligible nursing homes receive compensation for services covered by Medicaid. To ensure residents are not taken advantage of, nursing homes that manage 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 Wisconsin Resident Fund Bond?
Wisconsin requires each nursing home that manages resident funds to purchase a surety bond before becoming certified 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 nursing facilities act unethically with their money.
How Can an Insurance Agent Obtain a Wisconsin Resident Fund Surety Bond?
BondExchange makes obtaining a Wisconsin Resident Fund bond easy. Simply log in to your account and use our keyword search to find the “resident” 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.
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.
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Is a Credit Check Required for the Wisconsin Resident Fund Bond?
Surety companies will run a credit check on the nursing home owners to determine eligibility and pricing for the Wisconsin Resident Fund 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 Wisconsin Resident Fund Bond Cost?
The Wisconsin Resident Fund bond can cost anywhere between 0.75% to 5% of the bond amount per year. Insurance companies determine the rate based on several factors, including your customer’s credit score and experience. BondExchange also offers monthly pay-as-you-go options for these bonds. The chart below offers a quick reference for the bond cost on a $20,000 bond requirement.
$20,000 Resident Fund Bond Cost
| Credit Score | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 800+ | $150 | $15 |
| 625 – 799 | $200 | $20 |
| 600 – 624 | $500 | $50 |
| 575 – 599 | $600 | $60 |
| 500 – 574 | $1,000 | $100 |
Who is Required to Purchase the Wisconsin Resident Fund Bond?
Wisconsin requires all nursing facilities that manage resident funds to purchase a surety bond as a prerequisite to obtaining a Medicaid certification. To paraphrase Wisconsin statute 50.01(3), a nursing home is a facility that provides 24-hour nursing services to 5 or more individuals that are not related to the facility’s operator/administrator.
Exemptions to this definition include:
- Covents/facilities exclusively owned and operated by and for members of a religious order
- Hospices that directly provide inpatient care
- Residential care apartment complexes
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 Wisconsin Nursing Homes Become Certified Medicaid Providers?
Nursing homes in Wisconsin must navigate several steps to become certified Medicaid providers. Below are the general guidelines, but applicants should refer to the certification statutes for details on the process.
Step 1 – Obtain a Business License
Nursing homes must obtain business licenses through the DHS to be eligible to enroll as Medicaid providers. The process for obtaining a nursing home license is as follows:
1.a If the nursing home plans to construct a new facility or remodel an existing one, a plan review is required. All plan review applications should be emailed to [email protected]. Nursing homes may need to submit a Permission to Start Construction Request before starting any footing and foundation work. All additional plan review forms can be found here.
1.b Apply for licensure by mailing a completed application to the following address:
Division of Quality Assurance
Bureau of Nursing Home Resident Care
P.O. Box 2969
Madison WI, 53701-2969
Nursing homes must complete the application in its entirety and submit the following items:
Nursing homes submitting a Change of Ownership application must submit additional items.
Step 2 – Purchase a Surety Bond
Wisconsin does not require nursing homes to obtain any form of liability insurance as a prerequisite to obtaining a business license or Medicaid certification. Nursing homes that manage resident funds and receive Medicaid payments must purchase and maintain a surety bond in an amount that is greater than or equal to all resident funds held by the nursing home at any given time.
Step 3 – Apply for a Medicaid Certification
Nursing homes can enroll as Medicaid providers after obtaining their business licenses. All Medicaid provider applications must be completed online here. Nursing homes that are certified solely as Medicaid providers must mail CMS-671 to:
Department of Health Services
DQA BNHRC
Attn: Elizabeth Laubenstein
1 W. Wilson, PO Box 2969
Madison, WI 53701-2969
Nursing homes must pass periodic surveys to maintain their Medicaid certification
Step 4 – Apply for a Medicare Certification (If Applicable)
Nursing homes seeking to become certified Medicare providers must mail a written request for Medicare certification to:
Department of Health Services
DQA BNHRC
Attn: Elizabeth Laubenstein
1 W. Wilson, P.O. Box 2969
Madison, WI 53701-2969
The following documents must be submitted along with the certification request:
Additionally, nursing homes must send CMS-855A directly to their fiscal intermediary and complete the Civil Rights Clearance online here.
How do Wisconsin Nursing Homes Renew Their Licenses and Medicaid Enrollments?
The DHS will send nursing homes instructions on renewing their licenses before expiration. Additionally, nursing homes will receive a revalidation notice in the mail with instructions on how to revalidate their provider enrollments. Nursing homes must revalidate their provider enrollment at least once every five years.
What are the Insurance Requirements for Nursing Homes in Wisconsin?
Wisconsin does not require nursing homes to obtain any form of liability insurance as a prerequisite to obtaining a business license or Medicaid certification. Nursing homes that manage resident funds and receive Medicaid payments must purchase and maintain a surety bond in an amount that is greater than or equal to all resident funds held by the nursing home at any given time.
How Do Wisconsin Nursing Homes File Their Bonds?
Nursing homes should mail their completed bond forms, including the power of attorney, to the following address:
Wisconsin Department of Health and Social Services
1 West Wilson Street
Madison, WI 53701
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 Wisconsin Nursing Homes Do to Avoid Claims Against Their Bonds?
To avoid claims on their bonds, nursing homes in Wisconsin must ensure that they faithfully account for all resident funds that they manage.
What Other Insurance Products Can Agents Offer Nursing Homes in Wisconsin?
Wisconsin does not require nursing homes to purchase liability insurance. However, most reputable nursing homes 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 Wisconsin Nursing Home Customers?
Wisconsin 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.