Intervening Change of Ownership (CHOW)
In situations where (1) the provider submits a Form CMS-855A initial application or CHOW application and (2) a CMS-855A CHOW application is subsequently submitted but before the contractor has received the tie-in notice from the CMS Regional Office (RO), the contractor shall abide by the following:
• Situation 1 – The provider submitted an initial application followed by a CHOW application, and a recommendation for approval has not yet been made with respect to the initial application – The contractor shall return both applications and require the provider to re-submit an initial application with the new owner’s information.
• Situation 2 - The provider submitted a CHOW application followed by another CHOW application, and a recommendation for approval has not been made for the first application - The contractor shall process both applications – preferably in the order in which they were received – and shall, if recommendations for approval are warranted, refer both applications to the State/RO in the same package. The accompanying notice/letter to the State/RO shall explain the situation.
• Situation 3 - The provider submitted an initial application followed by a CHOW application, and a recommendation for approval of the initial application has been made – The contractor shall:
• Return the CHOW application.
• Notify the State/RO via letter (sent via mail or e-mail) that there has been a change of ownership (the new owner should be identified) and that the contractor will be requiring the provider to resubmit a new initial application containing the new owner’s information.
• Request via letter that the provider submit a new initial CMS-855A application containing the new owner’s information within 30 days of the date of the letter. If the provider fails to do so, the contractor shall return the initial application and notify the provider and the State/RO of this via letter. If the provider submits the application, the contractor shall process it as normal and, if a recommendation for approval is made, send the revised application package to the State/RO with an explanation of the situation; the initially submitted application becomes moot. If the newly submitted application is denied, however, the initially submitted application is denied as well; the contractor shall notify the provider and the State/RO accordingly.
• Situation 4 - The provider submitted a CHOW application followed by another CHOW application, and a recommendation for approval has been made for the first application - The contractor shall:
• Notify the State/RO via e-mailed letter that there has been a change of ownership (the new owner should be identified) and that the contractor will be requiring the provider to resubmit a new initial application containing the new owner’s information.
Process the new CHOW application as normal. If a recommendation for approval is made, the contractor shall send the revised CHOW package to the State/RO with an explanation of the situation; the first CHOW application becomes moot. If the newly submitted CHOW application is denied, the first application is denied as well; the contractor shall notify the provider and the State/RO accordingly
Electronic Funds Transfer (EFT) Payments and CHOWs
In a CHOW, the contractor shall continue to pay the old owner until it receives the tiein/approval notice from the RO. Hence, any application from the old or new owner to change the EFT account or special payment address to that of the new owner shall be rejected. It is ultimately the responsibility of the old and new owners to work out any payment arrangements between themselves while the contractor and RO are processing the CHOW. It is advisable that the contractor notify the new owner of this while the application is being processed.
Pre-Approval Changes of Information
A. Seller
If – prior to the issuance of the tie-in notice – the contractor receives from the seller a Form CMS-855 request to change any of the provider’s enrollment data, the contractor shall reject the change request if the information in question involves changing the provider’s:
1. Electronic funds transfer or special payment address information to that of the buyer (as described in section 15.7.7.1.5 of this chapter)
2. Practice location or base of operations to that of the buyer
3. Ownership or managing control to that of the buyer
4. Legal business name, tax identification number, or “doing business as” name to that of the buyer.
All other “pre-tie-in notice” Form CMS-855 change requests from the seller can be processed normally.
B. Buyer
If – prior to the issuance of the tie-in notice – the contractor receives from the buyer a Form CMS-855 request to change any of the provider’s existing enrollment information, the contractor shall reject the change request. Until the tie-in notice is issued, the seller remains the owner of record. Hence, the buyer has no standing to submit Form CMS-855 changes on behalf of the provider.
Tie-In/Tie-Out Notices and Referrals to the State/RO
A. Issuance of Tie-In/Tie-Out Notices
A tie-in or tie-out notice (CMS-2007) is generally issued in the following circumstances:
1. Initial enrollments
2. CHOWs
3. Voluntary terminations
4. Involuntary terminations (e.g., provider no longer meets conditions of participation or coverage) prompted by the state/RO
With the exception of voluntary and involuntary terminations, each of the transactions described above requires a referral and recommendation to the state/RO. (Depending on the specific RO, certain changes of information may also result in the issuance of a CMS-2007.)
B. Form CMS-855 Changes of Information, Stock Transfers, and Other Transactions
1. Referrals to State/RO
The following is a list of Form CMS-855A transactions that generally require a recommendation and referral to the state/RO:
• Addition of outpatient physician therapy/outpatient speech pathology extension site
• Addition of hospice satellite
• Addition of home health agency branch
• Change in type of Prospective Payment System (PPS)-exempt unit
• Conversion of a hospital from one type to another (e.g., acute care to psychiatric)
• Change in practice location or subunit address in cases where a survey of the new site is required
• Stock transfer
In these situations, the Provider Enrollment, Chain and Ownership System (PECOS) record should not be switched to “approved” until the contractor receives notice from the RO that the latter has authorized the transaction. However, if the contractor knows that the particular state/RO in question typically does not review, approve, or deny this type of transaction, the contractor need not send the transaction to the state/RO for approval and shall instead follow the instructions in (B)(2) below.
(If the transaction is a stock transfer, the contractor need not send the transaction to the state/RO for approval (and shall instead follow the instructions in (B)(2) below) if the following three conditions are met:
(1) The contractor is confident that the transaction is merely a transfer of stock and not a CHOW,
(2) The RO in question (based on the contractor’s past experience with this RO) does not treat stock transfers as potential CHOWs, and
(3) The contractor knows that the particular state/RO in question does not review, approve, or deny this type of transaction.
If any of these 3 conditions are not met, the contractor shall send the transaction to the state/RO for approval.)
RO approval for the transactions listed in (B)(1) may be furnished to the contractor via tie-in notice, letter, e-mail, fax, or even telephone; the contractor may accept any of these formats.
If the RO (after receiving the transaction from the contractor for review) notifies the contractor that it does not normally review/approve/deny such transactions, the contractor may finalize the transaction (e.g., switch the PECOS record to “approved).
2. Post-Approval RO Contact Required
Form CMS-855A changes that do not mandate a recommendation to the state/RO but do require post-approval correspondence with the RO include:
• Deletions/voluntary terminations of practice locations or hospital subunits
• Legal business name, tax identification number, or “doing business as name” changes that do not involve a CHOW
• Address changes that do not require a survey of the new location
• Addition of hospital practice location
• The transactions (excluding stock transfers) described in (B)(1) for which the contractor knows that the state/RO does not issue approvals/denials
• Stock transfers for which the 3 conditions mentioned in (B)(1) are met.
For these transactions, the contractor shall: (1) notify the provider via letter, fax, e-mail, or telephone that the change has been made, and (2) switch the PECOS record to “approved.” The contractor shall also notify the state and RO of the changed information (via any mechanism it chooses, including copying the state/RO on the notification letter or e-mail) no later than 10 calendar days after it has completed processing the transaction. Such notice to the State/RO shall specify the type of information that is changing.
3. All Other Changes of Information For all Form CMS-855A change requests not identified in (B)(1) or (B)(2) above, the contractor shall notify the provider via letter, fax, e-mail, or telephone that the change has been made and shall switch the PECOS record to “approved.” The state and RO need not be notified of the change.
4. Revalidations, Reactivations and Complete Form CMS-855 Applications
In situations where the provider submits a: (1) Form CMS-855A reactivation, (2) Form CMS-855A revalidation, or (3) full Form CMS-855A as part of a change of information (i.e., the provider has no enrollment record in PECOS), the contractor shall make a recommendation to the state/RO and switch the PECOS record to “approval recommended” only if the application contains new/changed data falling within one of the categories in (B)(1) above. For instance, if a revalidation application reveals a new hospital psychiatric unit that was never reported to CMS via the Form CMS-855A, the contractor shall make a recommendation to the state/RO and await the RO’s approval before switching the record to “approved.”
In this situation, the contractor should forward the application to the state with a note explaining that the only matter the state/RO needs to consider is the new hospital unit. If the application contains new/changed data falling within one of the categories in (B)(2) above, the contractor can switch the PECOS record to “approved.” It shall also notify the state and RO of the changed information (via any mechanism it chooses, including copying the state/RO on the notification letter or e-mail) no later than 10 calendar days after it has completed processing the transaction.
C. Provider-Specific, Non-CMS-855
Changes If the contractor receives a tie-in notice or approval letter from the RO for a transaction/change regarding information that is not collected on the Form CMS-855A, the contractor need not ask the provider to submit a Form CMS-855A change of information.
D. Involuntary Termination Prompted by State/RO
If the contractor receives a tie-out notice from the RO that involuntarily terminates the provider’s Medicare participation because the provider no longer meets the conditions of participation, the contractor need not send a letter to the provider notifying it that its Medicare participation/enrollment has been terminated. (The RO will issue such a letter and afford appeal rights.) The contractor shall adhere to the instructions in section 15.27.2 of this chapter with respect to revoking the provider’s/supplier’s enrollment.
E. Other Procedures Related to Tie-In Notices, Tie-Out Notices and Approval Letters
1. Receipt of Tie-In When Form CMS-855A Not Completed -
If the contractor receives a tie-in notice or approval letter from the RO but the provider never completed the necessary Form CMS-855A, the contractor shall have the provider complete and submit said form. This applies to initial applications, CHOWs, practice location additions, etc., but does not apply to the cases described in subsection C above.
2. Delegation to State Agency – There may be instances when the RO delegates the task of issuing tie-in notices, tie-out notices or approval letters to the state agency. The contractor may accept such notices from the state in lieu of those from the RO. However, the contractor should first contact the applicable RO to confirm: (1) that the RO has delegated this function to the state, and (2) the specific transactions (e.g., CHOWs, HHA branch additions) for which this function has been delegated.
3. Review for Consistency -
When the contractor receives a tie-in notice or approval letter from the RO, it shall review its contents to ensure that the data on the notice/letter matches that on the Form CMS-855A. If there are discrepancies (e.g., different legal business name, address), the contractor shall contact the applicable RO to determine why the data is different.
4. Creation of New Logging and Tracking (L & T) Record Unnecessary -
The contractor is not required to create a new L & T record in PECOS when the tie-in notice arrives, as the existing record should not be in a final status and can therefore be modified. Simply changing the L & T status is sufficient.
5. Provider Inquiries – Once the contractor has made its recommendation for approval to the state/RO, any inquiry the contractor receives from the provider regarding the status of its request for Medicare participation shall be referred to the state or RO.
6. Timeframes - So as not to keep the PECOS record in “approval recommended” status interminably, if the contractor does not receive notification of approval from the RO after what it deems to be an excessive amount of time, it may contact the RO to see if such approval is forthcoming.
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