Recently, CMS changed its process for approving provider transactions structured as equity transfers – which in Medicare’s eyes is generally classified as a change of information (“CHOI”). Previously, the process for approving such a transaction was for the provider to submit the applicable 855 Enrollment Application as CHOI to the provider’s assigned Medicare Administrative Contractor (“MAC”) and the MAC would then approve the CHOI. With this prior process, a provider only needed MAC approval for CHOIs. The CMS Regional Office only reviewed initial enrollments and changes of ownership (“CHOWs”).

But CMS has changed this process. Now, after the MAC’s review of the 855 Enrollment Application, all transactions involving equity transfers are then sent to the provider’s respective CMS Regional Office to verify that the transaction truly constitutes an equity transfer instead of a CHOW. If the transaction is truly a stock transfer, the provider will receive an approval letter from its CMS Regional Office stating that its transaction is in fact a CHOI and not a CHOW. This is an additional step in the transaction’s regulatory process that we believe will add 1-2 months to obtain regulatory approvals for transactions structured as equity transfers.