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How do changes of ownership affect the purchase or sale of a Medicare-funded business?

Updated: Jul 31, 2023

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Medicare is a federal health insurance program in the United States that primarily serves people who are 65 years old or older and certain younger individuals with disabilities or specific medical conditions. A change of ownership with Medicare typically refers to situations where a healthcare provider, such as a hospital, nursing home, home health agency, or hospice agency, undergoes a change in ownership or control. This change can happen due to various reasons, such as selling the facility, merging with another entity, or transferring ownership to a new organization.

When a healthcare provider undergoes a change of ownership, there are specific steps and regulations that need to be followed to ensure uninterrupted services to Medicare beneficiaries. Here's an overview of how the process generally works:

1. **Notification**: The current owner of the healthcare provider must notify the Centers for Medicare & Medicaid Services (CMS) about the impending change of ownership. This notification should be made at least 30 days before the anticipated date of the change.

2. **CMS Review and Approval**: CMS reviews the proposed change of ownership to assess whether the new owner meets all the necessary requirements to participate in the Medicare program. This review is crucial to ensure that the provider can continue to serve Medicare beneficiaries and comply with all Medicare rules and regulations.

3. **Provider Enrollment Application**: The new owner must submit a new provider enrollment application to CMS. This application includes detailed information about the new ownership structure, the organization's governing body, financial information, and compliance history. The application is reviewed to ensure that the new owner is qualified to participate in the Medicare program.

4. **Site Visit**: In some cases, CMS may conduct a site visit to the healthcare provider to assess the organization's readiness for the change of ownership and its ability to provide quality care to Medicare beneficiaries.

5. **Agreement with Existing Beneficiaries**: The new owner must enter into an agreement with existing Medicare beneficiaries, ensuring that they will continue to receive the same level of care and services under the new ownership. This agreement should include information about any changes in services or potential disruptions in care.

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6. **Billing and Reimbursement**: During the transition period, there might be changes in billing and reimbursement processes. The new owner must ensure that Medicare claims are submitted accurately and promptly to avoid delays in payments.

7. **Compliance and Quality Assurance**: The new owner must comply with all Medicare regulations and continue to maintain high-quality standards of care. CMS may conduct regular audits and inspections to ensure ongoing compliance.

It's important to note that the process of a change of ownership with Medicare can be complex, and there may be variations in requirements depending on the type of healthcare provider and the specific circumstances of the change. Healthcare providers and organizations should work closely with CMS and seek legal and regulatory guidance to navigate the process successfully and ensure continued access to Medicare beneficiaries' services.

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