Tips to Facilitate the Change of Ownership (CHOW) Process

A change of ownership (CHOW) typically occurs when a Medicare provider has been purchased (or leased) by another organization. The CHOW results in the transfer of the previous owner’s Medicare Identification Number and provider agreement (including the previous owner's outstanding Medicare debts) to the new owner. The regulatory citation for CHOWs is in the Code of Federal Regulations: 42 CFR 489.18 (PDF, 143 KB)

CHOW Reminders

  • As referenced in 42 C.F.R. 424.520(b), changes of ownership or control must be reported within 30 days of the effective date of the change
  • The transfer of corporate stock or the merger of another corporation into the provider corporation does not constitute a CHOW
    • In the case of an acquisition/merger, the seller/former owner’s Medicare Identification Number dissolves
    • In a CHOW, the seller/former owner’s provider number typically remains intact and is transferred to the new owner
      • If the Tax Identification Number changes, it is typically submitted as a CHOW
      • A CHOW generally occurs when the assets of the company are sold
    • The purchaser must be willing to accept terms and conditions of the provider agreement
    • Purchaser must accept responsibility for all liabilities of the current owner

Seller/Former Owner

  • Seller/former owner must complete and submit the following sections of the CMS 855A form: 1A, 2F, 13, and 15 or 16
  • Seller/former owner CMS-855A CHOW application does not require a recommendation for approval or denial; any recommendations will be based upon the CHOW application received from the new owner

Buyer/New Owner: Requirements

  • Complete and submit all sections of the CMS 855A form, except 2G and 2H
  • Obtain National Provider Identifier (NPI) before enrolling
  • Submit the authorization agreement for electronic funds transfer (EFT), form CMS-588 (Electronic Funds Transfer Agreement)

EFT Payments and CHOWs

  • Palmetto GBA will continue to pay the seller/former owner until we receive the tie-in notice from CMS
  • After CHOW processing is complete based on CMS approval, the seller/transferor will no longer be allowed to bill for services
  • Palmetto GBA will no longer have the ability to update the NPI crosswalk in order for the Seller to complete their billing
  • It is ultimately the responsibility of the seller/former owner and buyer/new owner to work out any payment arrangements between themselves for claims for services furnished during the CHOW process period  

Additional Documentation Requirements

  • Submit a copy of the bill of sale or purchase agreement
  • Submit all appropriate licenses and certifications required by their state
  • Submit IRS document confirming Tax Identification Number
  • Submit Articles of Incorporation

References:

Helpful Resources

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