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Key takeaways
- Review home health and hospice ownership history, including cumulative changes.
- An exception requires facts and supporting records.
- Current enrollment restrictions can affect the path after a non-exempt change.
Read the ownership history first
The rule in 42 CFR 424.550(b) looks at a covered change within thirty-six months of initial Medicare enrollment or the most recent change in majority ownership. Without an applicable exception, the agreement and billing privileges do not convey. The rule requires initial enrollment and a state survey or approved accreditation instead. (Source: 42 CFR 424.550)
That description does not promise a usable initial-enrollment route today. The current moratorium guide explains the separate restriction.
A fictional cumulative ownership screen
Assume the same fictional buyer acquires direct interests in the same HHA during the relevant thirty-six-month period. The percentages refer to the whole entity, with no dilution or other change.
| Fictional step | Direct interest acquired | Total direct interest |
|---|---|---|
| First purchase | 30 percent | 30 percent |
| Second purchase | 25 percentage points | 55 percent |
Thirty plus twenty-five is fifty-five percent. Looking only at the second purchase would miss the combined majority interest. The federal definition expressly addresses cumulative transactions. (Source: 42 CFR 424.502)
This is a screening example, not a determination that a real deal triggers the rule or lacks an exception. Check the interest, parties and dates. Read the full history of the deal.
Check an exception with evidence
The regulation lists four exceptions. They concern qualifying full cost reports, internal restructuring of the parent company, a change in business structure with the same owners, and an individual owner's death.
The detailed 36-month guide develops those questions. Do not reduce an exception to a label such as restructuring without checking its actual conditions.
Carry the finding into the closing plan
Keep a timeline of owners and enrollment dates in the controlled file. Add the evidence for any claimed exception. Connect unresolved issues to the provider agreement and 855A application.
CMS's moratorium page was checked September 8, 2026. It states an initial six-month period beginning May 13 and allows extensions. A forecast should not assume an automatic reopening date. (Source: CMS enrollment moratoria)
Frequently asked questions
Does the rule apply only to home health agencies?
No. The cited federal rule covers both home health agencies and hospices. Do not assume that rules for these providers apply unchanged to a skilled nursing facility, assisted-living community or private-pay home-care business. Identify the actual provider type before reviewing ownership.
Does every stock sale trigger the rule?
No blanket answer applies. The CIMO definition includes more than a 50 percent direct ownership interest and the cumulative effect of specified transactions in the relevant period. Have counsel and the Medicare contractor assess the complete facts. A transaction label is not enough.
Can two full cost reports support an exception?
The rule includes an exception for two consecutive years of full cost reports since initial enrollment or the last majority change, whichever is later. Low-utilization or no-utilization reports do not qualify as full reports for that exception. Verify the reports and relevant dates.
Can the buyer simply apply as a new provider?
Do not assume so. The rule's initial-enrollment path must be read with current restrictions. As checked September 8, 2026, CMS's May 13 nationwide HHA and hospice moratorium covers initial applications, including non-exempt CIMOs. Obtain transaction-specific advice before relying on that path.
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 424.550 (2026). Retrieved September 5, 2026.
- eCFR: 42 CFR 424.502 enrollment definitions (2026). Retrieved September 8, 2026.
- CMS: provider enrollment moratoria (2026). Retrieved September 5, 2026.