Industry News: Ohio Auditor Yost Suggests Surety Bonds as Solution to Unpaid Debts

Ohio state Auditor Dave Yost is recommending that Ohio should require surety bonds for Medicaid providers. The Medicaid bonds would allow the state to recover overpayments and fraudulent charges more easily.


Medicaid, a healthcare program funded both federally and at the state level, requires 39 percent of the state budget as it pays for half of all births in Ohio, covers some portion of healthcare services for 3-million Ohioans, pays for most nursing home care in the state, and reimburses 110,000 providers for various healthcare-related services. Over the last seven years, auditors have found that millions in overpayments and other recoverable costs were made to 123 providers—but only about 5 percent of these losses have been repaid.

The Proposed Bill

Ohio State Sen. Peggy Lehner, R-Kettering, is sponsoring a bill to fight this problem, and Yost is backing the bill. The law would require surety bonds and compliance and billing training for “high-risk” Medicaid providers—a requirement that is already the law in Florida, Indiana, New York, and Texas. The bond amounts for home-healthcare and transportation Medicaid providers would be $50,000, and for individual home health aides would be $10,000.

The bill defines “high-risk” providers to include home health care and transportation providers. These providers are responsible for 84 percent of overpayments and fraud, yet they make up only 16 percent of Medicaid service providers in Ohio.

How Medicaid bonds would work

A Medicaid bond may sound like a type of liability insurance for a Medicaid provider, but it is actually a kind of surety bond—a three-part contract—designed to help protect the public, and in this case, the State of Ohio. Surety bonds are agreements between the surety who issues the bond, the Medicaid provider, and the state. The aim is to encourage only ethical Medicaid providers to operate in the state and to guard the public interest against fraudulent providers.

If a provider engages in fraudulent activities, receives an overpayment, isn’t qualified to provide services, or otherwise doesn’t follow the law, the state can make a claim. When the state does, the surety company who guaranteed the bond pays out the claim. Then, the company can force the Medicaid provider to reimburse them for all claim costs.

Getting a Medicaid bond

The new bill states that Ohio Medicaid providers will need to acquire and maintain a surety bond of $50,000 or $10,000 for individual home healthcare workers. Medicaid providers in Ohio should work with a bonding agency that can assist them in securing the best price for the right bond. How much your Medicaid bond costs depends on various factors, and you need an experienced agent to help you navigate this new territory in Ohio.


For skilled help getting the right bond to meet the new legal requirements, get the experienced team at Viking Bond Service!