By: Matthew Fischer
Due to financial and regulatory constraints, many companies are merging or purchasing other healthcare companies. However, prior to closing any transaction, these companies need to first determine whether government agencies must be provided advance notice of the change of ownership (CHOW). As an example, if Medicare is involved, these companies might be required to report the CHOW.
This issue is not one to dismiss or ignore because if companies fail to comply, they face significant penalties. In a recent “MLN Connects” newsletter, the Centers for Medicare & Medicaid Services (CMS) issued a reminder to report changes in ownership. The newsletter cites to an Office of Inspector General (OIG) report from 2016 that found a substantial amount of ownership changes were not being reported.
A CHOW generally occurs when a Medicare provider has been purchased (or leased). In these transactions, the Medicare identification number and provider agreement will be transferred to a new owner. Under Medicare regulation, changes in ownership must be reported within 30 days of the effective date. However, some transactions will not constitute a CHOW. For example, a transfer of corporate stock or merger of a corporation into a provider corporation is not considered a CHOW under Medicare’s regulations.
In 2016, the OIG conducted a study comparing a sample of owner names using information from CMS and State Medicaid programs. The OIG concluded that over three quarters of Medicare providers in their review had owner names on record with CMS that did not match the information with State Medicaid programs. In its report, the OIG recommended that CMS increase coordination with State programs and take appropriate action against providers with non-matching names.
The OIG’s report combined with Medicare’s recent reminder indicate providers should expect continued, increased scrutiny from CMS and OIG. Providers need to be aware of all reporting requirements and ensure that all information is up to date and accurate. Failing to comply could lead to the revocation of Medicare billing privileges.
