Nursing homes and other healthcare facilities must purchase a surety bond or provide assurance satisfactory to the Secretary to ensure the financial security of all personal funds of residents deposited with the facility. The surety bond protects the resident or the State from any loss due to the facility's failure to hold, safeguard, manage, or account for the resident's funds, including any acts or errors of negligence, incompetence, or dishonesty. Self-insurance and funds deposited in bank accounts protected by the Federal Deposit Insurance Corporation are not acceptable alternatives. The State survey agency may refer the facility to the State's fiscal department if they cannot determine if the facility is in compliance. If a corporation has a surety bond that covers all of its facilities, there should be a separate review of the corporation's surety bond by the appropriate State agency to ensure that all the residents in the corporation's facilities within that State are covered. This letter requires nursing homes and other healthcare facilities to purchase a surety bond or provide assurance satisfactory to the Secretary to ensure the financial security of all personal funds of residents deposited with the facility. It also requires a separate review of the corporation's surety bond by the appropriate State agency to ensure that all the residents in the corporation's facilities within that State are covered.

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