Michigan Nursing Home Administrator (NHA) Practice Exam

What is the minimum surety bond amount required for a patient trust fund?

1. $1,000

2. $2,000

3. 125% of the previous year’s average

4. Either $2,000 or 125% of the previous year’s average, whichever is greater

The correct answer is: Either $2,000 or 125% of the previous year’s average, whichever is greater

The minimum surety bond amount required for a patient trust fund is designed to provide a level of financial security that protects residents' funds from mismanagement or loss. The correct answer states that the bond must be either $2,000 or 125% of the previous year's average, whichever amount is greater. This ensures that the facility has a sufficient bond in place to cover potential losses or misappropriations, reflecting the increasing value and activities in the fund over time. By specifying two thresholds—the fixed amount and the percentage of the previous year's average—the regulation accommodates variability in patient trust fund balances. If the patient trust fund grows, the bond amount adjusts accordingly, ensuring that higher balances are always secured. This dual approach promotes responsible financial management for the benefit of the residents, safeguarding their assets while also imposing an obligation on the facility to maintain appropriate oversight. In contrast, specifying just a fixed amount or a percentage without considering the greater of the two could leave either residents unprotected if funds rise or administrators burdened excessively if minimum balances persist. Thus, the option encapsulates a comprehensive approach to financial surety in healthcare settings.