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Key takeaways
- An early sale needs an enrollment feasibility review before the parties rely on existing billing.
- The 36-month ownership rule and the temporary enrollment moratorium answer different questions.
- Use documented dates and conditions when deciding whether to proceed, revise or defer the proposed handoff.
Short answer
The seller needs to know what the buyer may run after the deal closes. Having clients and a current provider agreement does not settle that question. Medicare enrolls a specific provider, and a sale can affect whether the buyer may keep using that enrollment.
Preparing a business for sale and closing the deal are different steps. Identify the buyer, the enrolled entity, the interests being sold and the planned handoff. The sale team needs to review those facts before telling the buyer that existing Medicare billing will continue.
Longer answer
The federal definition of a change in majority ownership, or CIMO, concerns more than 50 percent direct ownership in an HHA or hospice within the specified period. It also includes cumulative transactions. The percentage in the latest purchase agreement alone may therefore leave the relevant history incomplete. (Source: 42 CFR 424.502)
Under section 424.550(b), a covered change within 36 months of initial enrollment or the most recent CIMO generally requires new enrollment unless a specified exception applies. The buyer must also obtain the required survey or accreditation. The detailed 36-month guide explains the chronology and exception evidence; a seller's statement that the agency is established does not complete that work. (Source: 42 CFR 424.550)
Review that result alongside the current moratorium. On September 8, 2026, CMS's active-moratoria page describes the nationwide HHA and hospice restriction that began May 13. It covers initial applications, including non-exempt CIMOs. The moratorium guide explains why new enrollment is more than routine paperwork during that period. (Source: CMS active moratoria)
CMS treats existing providers and some ownership changes differently from new enrollments. It also gives a separate treatment to applications received before the moratorium began. Check the actual records before concluding that these points let a deal proceed as planned. (Source: CMS moratorium Q&As 8, 11–13)
What it depends on
Build a short decision file for the deal. Include the first enrollment record, later sale records, current ownership chart and any claimed exception. Note which facts are still unknown and how they affect the answer. If a key letter is missing, name who will find it and check what it says.
Assign each question to a team member. The home-health diligence guide helps organize the records. Use the Medicare CHOW guide for related transfer questions. CHOW and CIMO need joint review because passing one test does not settle the other.
Example
Consider two fictional agencies offered for a September 2026 handoff. Assume each proposal transfers a majority direct interest, neither has a reviewed exception, and neither has a relevant application received before May 13. The table illustrates questions, not findings about actual providers.
| Fictional record | Agency A | Agency B | Decision still needed |
|---|---|---|---|
| Initial Medicare enrollment | January 2025 | January 2018 | Confirm the effective enrollment record |
| Latest CIMO | None after initial enrollment | January 2025 | Verify the later ownership event |
| Seller's initial explanation | Recently enrolled business | Long-established business | Do not substitute business age for ownership history |
| Proposed September 2026 handoff | Within 36 months of initial enrollment | Within 36 months of the stated later CIMO | Assess the applicable rule, exception evidence and moratorium |
Agency B's older enrollment does not, by itself, give a different answer. The assumed January 2025 event still matters. Both sellers need a supported path before the buyer counts on future Medicare receipts. The example does not find an exception or approve another deal structure.
What to do next
Collect the enrollment and ownership records using the seller document guide. Identify the current provider agreement and ask the Medicare Administrative Contractor and healthcare counsel to assess the proposed facts. Keep the written response with the assumptions it addresses.
Use the letter-of-intent guide to turn unresolved commercial conditions into negotiation questions. State which evidence is needed before the planned handoff and what happens if the proposed path is unavailable. Recheck the assessment when the buyer, structure, effective date or CMS position changes. A revised deal needs a revised conclusion.
Frequently asked questions
Does the age of the company prove it is outside the rule?
No. The relevant history includes initial Medicare enrollment and the most recent majority-ownership change. A company formed many years ago may have a recent transaction that matters. Verify enrollment and ownership records instead of using the incorporation date as the answer.
Can a buyer acquire interests in stages to avoid review?
Do not assume each purchase stands alone. The CIMO definition includes cumulative ownership transactions. Give the review team the complete before-and-after ownership history, including earlier acquisitions. This page does not approve a structure or describe a way around enrollment requirements.
Does a cost-report exception mean the whole transaction is approved?
No. The stated exception requires qualifying full cost reports and the relevant timing; tax returns are different records. Even when an exception applies, state licensing, enrollment reporting, payer agreements and other transaction conditions still need their own review.
Can the parties rely on the moratorium ending after six months?
The CMS page describes an initial six-month period and possible extensions. That is not a commitment to accept a particular application on a future date. Recheck the current CMS notice and obtain an assessment of the proposed enrollment path before relying on it.
Sources
Sources are dated to distinguish current guidance from earlier publications. They support the identified facts; the transaction questions and examples are educational analysis.
- eCFR: 42 CFR 424.502 enrollment definitions (2026). Retrieved September 8, 2026.
- eCFR: 42 CFR 424.550 (2026). Retrieved September 5, 2026.
- CMS: provider enrollment moratoria (2026). Retrieved September 5, 2026.
- CMS: home health and hospice moratorium FAQs (2026). Retrieved September 5, 2026.