Change of ownership (CHOW) and Medicaid in a nursing home sale
The three sets of filings that move a nursing home to a new operator, and how to keep care and billing running through them.
A change of ownership (CHOW) is the set of filings that moves a nursing home's state licence, Medicare provider agreement and Medicaid provider agreement to the new operator, timed so that care and billing do not stop.
The three tracks
State licensure. The new operator applies to the state for the licence. States set their own notice periods and reviews, so the timeline starts with your state's rule.
Medicare. The new operator reports the change to Medicare (form CMS-855A). By default the existing provider agreement is assigned to the new owner, who then takes on its terms, including any amounts owed to Medicare. A buyer can refuse assignment, but then the building enrolls as new and cannot bill Medicare until it is certified.
Medicaid. Each state runs its own enrollment and provider agreement. Some states carry the rate over to the new operator; others reset it. Open cost reports and rate appeals need a plan before closing.
Keeping billing running
The operations transfer agreement sets who bills for what, and when. The goal is that residents' care and the building's cash flow never pause. In our Mississippi change of ownership, the takeover date was set to line up with approval and billing timelines, with no billing interruption.
Rate appeals and frozen rates
A pending Medicaid rate appeal is not a reason to wait. In the same Mississippi sale, rates were frozen under appeal, and the transition was structured to preserve the facility's reimbursement position.
Residents, families and staff
State and federal rules require notices to residents and families, and a good plan tells staff before rumours do. Timing is agreed with you in advance.
Questions owners ask
Does the Medicaid rate carry over to the new owner?
It depends on the state. Some carry the existing rate over; others reset it under their own method. We check your state's rule at the start.
Who is responsible for the seller's past Medicare overpayments?
If the buyer accepts assignment of the Medicare provider agreement, the buyer takes on its obligations under federal rules, which is why the purchase agreement usually addresses them with escrows or indemnities.
Can I sell during a Medicaid rate appeal?
Yes. In our Mississippi change of ownership the rates were frozen under appeal, and the takeover was timed to approval and billing so the appeal position was preserved.