Medicare CHOW: Provider Agreements & Ownership

Start with the provider and the proposed change

Medicare CHOW review starts with the provider that holds the agreement, not simply the business name on a listing. Identify the legal entity, Medicare enrollment record, service type, and locations. Then describe what will change: assets, shares, members, partners, leases, or the surviving entity in a merger.

An ownership chart before and after closing helps the advisers see the actual transaction. Include property and management entities where relevant, but distinguish them from the enrolled provider. Two entities may share an owner or trade name. That does not make them the same legal business.

This guide uses federal sources reviewed September 6, 2026. It explains the work to organize and the evidence to obtain. The Medicare Administrative Contractor, or MAC, reviews enrollment filings. The MAC and other relevant authorities handle the required decisions. This guide cannot approve a deal.

For the terms behind this process, read CHOW and provider agreement. The complete buying guide shows how unresolved authority affects an acquisition decision and proposed closing date.

Apply the federal CHOW definition carefully

42 CFR 489.18 addresses specific partnership, sole-proprietor, corporate, and leasing events. Some changes are treated differently depending on which entity survives and what actually transfers. Do not apply its corporate-stock rule to every type of ownership change. (Source: 42 CFR 489.18)

The CMS manual notes that other entity types, including LLCs, can have CHOWs and that its examples are not exhaustive. Do not force a complex transaction into the closest label without reviewing the facts. Ask for a written explanation of the classification and the authority supporting it. (Source: CMS Program Integrity Manual, section 10.6.1.1.2)

Decide how the provider agreement is handled

The regulation provides for automatic assignment of the existing agreement when a covered CHOW occurs. An assigned agreement retains applicable statutes, regulations, and original terms and conditions. It is not a fresh compliance record merely because ownership changed. (Source: 42 CFR 489.18)

CMS-855A explains that assignment includes outstanding Medicare debt of the old owner. Review known overpayments, pending audits or appeals, and payment adjustments with qualified advisers. A seller may promise to cover the buyer's loss. That promise does not decide whether Medicare can collect a debt under the assigned agreement. (Source: CMS-855A, September 2024 revision)

CMS also describes the consequences of declining assignment. The old agreement should terminate, and the purchaser becomes a new applicant that must initially enroll. That choice can affect whether the buyer may enroll in Medicare. It also affects the plan for patient care and when cash comes in. It needs a plan before closing, not a last-minute checkbox choice.

The assignment and rejection decision guide adds a two-path record and a separate cash exercise. Use it to distinguish enrollment feasibility from receipt timing. Resolve both before the team relies on a planned closing date.

Review the conditions that continue

Section 489.18 lists conditions that remain with an assigned agreement. They include existing correction plans, health and safety standards, and civil-rights duties. Required ownership and financial-interest disclosures also continue. Obtain the current records and identify any unresolved duties. (Source: 42 CFR 489.18)

The records may contain sensitive information. Use the appropriate confidential review process and limit access to those who need it. The patient-records guide explains why custody and access require their own planning.

Organize both parties' enrollment work

42 CFR 424.550 requires the current and prospective owners to complete and submit enrollment applications before completion of a covered CHOW. The rule also describes consequences for missing or incomplete filings. Its reference to deactivation when a new owner fails to submit within 30 days after the change does not erase the pre-completion requirement. (Source: 42 CFR 424.550)

For institutional providers, CMS-855A contains the CHOW information in section 2G. In the currently linked September 2024 version, the former owner completes the specified sections and the new owner completes the entire application. Follow the current instructions for the actual submission and coordinate with the MAC.

The form asks whether the new owner accepts the provider agreement. It also calls for a bill of sale with the application and the final sales agreement once executed. Confirm the documents and sequence required for the transaction rather than assuming that a draft purchase agreement completes the record. (Source: CMS-855A)

Separate application progress from approval

Track submission, receipt, requests for information, responses, recommendations, and final decisions as different events. An application number or delivery confirmation proves that a step occurred. It does not prove that CMS accepted the transaction's legal classification or that billing may continue as projected.

Assign one person to maintain the status record across the parties and advisers. That person should know which documents are still missing, who must sign, and whether a change in dates or structure requires updated information. Avoid several people sending inconsistent ownership charts or effective dates.

There is no single closing timeline in this guide. Timing depends on the provider, the rules, and the required reviews. Missing information can also affect progress. Build a timetable around actual dependencies, and have counsel connect the required decisions to the purchase agreement and financing conditions.

Add the home health and hospice ownership review

Home health and hospice have a separate majority-ownership rule. Certain changes within 36 months of initial enrollment or the most recent majority change can require initial enrollment and a new survey or accreditation unless an exception applies. Review the 36-month rule guide for the chronology and exception evidence. (Source: 42 CFR 424.550)

This matters even when the corporate-stock provision of 489.18 does not classify the transaction as a CHOW. The two rules should be assessed separately, with the conclusions written clearly enough that the buyer, seller, lender, and counsel understand their scope.

The current home health and hospice moratorium adds another question when initial enrollment is required. It also has guidance about locations and certain acquisitions or mergers. A plan that assumes new enrollment or expansion must be tested against that guidance. (Source: CMS moratorium FAQs, July 2026)

Map state, payer and contract requirements separately

Medicare agreement assignment does not itself establish that a state license, Medicaid enrollment, commercial payer contract, or property lease transfers. Each may use its own definition of ownership or control. Record the specific authority or contract clause and the evidence required to satisfy it.

The buyer licensing timeline connects those separate tracks with expiring commercial documents. Its fictional schedule shows why a later permission date may outlast lease consent, financing or an insurance quote. Renewed commercial terms do not replace regulatory evidence.

Use the asset-versus-stock guide to connect these findings to the proposed acquisition scope. Check that the legal documents, forms, ownership charts, and forecast describe the same deal.

Establish a closing-readiness record

For every required decision, record the owner of the task, supporting documents, current status, and consequence of delay. Identify what must be true before closing and what must be monitored afterward. The due-diligence checklist helps coordinate that broader review.

Ask the operating team to confirm who will direct services, pay staff, maintain records, submit claims, and respond to patients or families through the transition. Any interim management arrangement needs its own authority review. Its commercial title does not confer permission to operate or bill.

Common mistakes in Medicare CHOW planning

• Treating every acquisition as the same kind of CHOW.
• Assuming a corporate-stock rule eliminates state or majority-ownership review.
• Ignoring the continuing conditions of an assigned agreement.
• Waiting until closing to decide whether assignment is accepted.
• Treating a filed application as a completed approval.
• Using a projected billing date without evidence for that assumption.

A useful review shows how the deal can proceed and who must do each task. Forms alone do not prove it is ready. If the structure, location, or effective date changes, revisit the relevant conclusions before the parties continue relying on them.

For a short explanation of the records in this process, read Medicare certification and CMS-855A. Use the definitions to identify each document before applying the detailed transaction steps in this guide.

The overpayment-liability example separates a credited repayment from an unresolved issue. The interim-management definition maps proposed transition duties without treating a private contract as permission to operate or bill.

The seller’s Medicare number question separates collection of earlier receivables, claims for later care and an outside billing agent’s work. Use that task map to identify which provider, service dates and authority each part of the handoff requires.