Examples of Ownership Transactions

10.2 - Examples of Ownership Transactions (Rev.113, Issued: 05-17-13, Effective: 05-17-13, Implementation: 05-17-13) In the following situation, the ownership transaction does not ordinarily result in a change of ownership: • If Corporation X maintains a contract with CMS and subsequently purchases the stock of Corporation Y, the ownership of Corporation X has not ordinarily changed. In the following situations, the ownership transaction ordinarily results in a change of ownership as defined in §10.1 above. • If Corporation A, Corporation B, and Corporation C, all subsidiaries of Corporation P (a holding company), consolidate into Corporation ABC (a new legal entity), and Corporation A, B, and C are fully dissolved, this constitutes a change in ownership in all Corporations A, B, and C. • If Corporation A sells or transfers portions of its operations, including operations related to its MA contract to Corporation B, then: o If Corporation B has already been deemed an eligible MA entity by CMS, then this constitutes a change in ownership of the MA contract to Corporation B. o If Corporation B is not already deemed an eligible MA organization, it must submit an application for eligibility to CMS as provided in Chapter 11, "Application Procedures and Contract Requirements,” of this manual. • If Corporation A, a Medicare Advantage Organization, merges with its parent, Corporation B, an eligible MA organization, and Corporation A does not survive the merger, this constitutes a change in ownership for Corporation A. The following example illustrates how the same transaction may have different effects of change of ownership on different corporations. • If Corporation X maintains a contract with CMS and subsequently acquires Corporation Z, resulting in a merger then: o If Corporation X survives, the ownership of Corporation X has not changed. o If Corporation Z survives, this constitutes a change in ownership of Corporation X.