The Texas Department of Aging and Disability Services (DADS) adopted revised regulations concerning performance bonds for nursing facilities. Under these regulations, applicants for Medicaid beds in a nursing facility must file a performance bond of $500,000 or an equivalent financial security. Before, the executive commissioner of the Health and Human Services Commission could require an applicant to provide the bond, but now it is mandatory.
The purpose of this performance bond is to ensure that applicants provide the Medicaid beds outlined in the waiver within the time limit provided by DADS. Applicants who are granted Medicaid beds under a high occupancy waiver, community needs waiver, economically disadvantaged waiver, rural county waiver or small house waiver must provide this bond within 90 days of waiver approval from DADS, or else the waiver will be revoked. The bond must adhere to the following provisions:
- Be executed by a corporate entity in accordance with Texas Insurance Code Chapter 3503, Subchapter A
- Be in a form approved by DADS
- Display the name, address and telephone number of surety company
- Display the telephone number of the Texas Department of Insurance in accordance with Texas Insurance Code Chapter 521, Subchapter B
The bond remains valid until the facility is certified to participate in the Medicaid program and must be renewed annually. Applicants must notify DADS at least 60 days in advance if they do not want to renew their bond or if there is a change in the surety company administering the bond. For more information concerning Medicaid bed allocation requirements, check out Rule 19.2322 of the Texas Administrative Code or the Nursing Facility Requirements for Licensure and Medicaid Certification Handbook.
