Change of Ownership, Merger, and Termination Procedures

2202.17 - Change of Ownership, Merger, and Termination Procedures Affecting HHAs and OASIS Requirements (Rev. 125, Issued: 10-31-14, Effective: 10-31-14, Implementation: 10-31-14) It is imperative that the Medicare CCN be accurately reported on the OASIS assessments in all reports, including when HHAs undergo change of ownership, merger, or termination. Change of Ownership - Mergers In accordance with §489.18 and §3210, the merger of a provider corporation into another corporation constitutes a change of ownership. In the case of the merger of Agency A into Agency B, Agency A’s provider agreement and its associated CCN are terminated. Agency B retains its existing provider agreement and CCN. Agency A should provide the OASIS discharge comprehensive assessment for each discharged patient prior to or at the effective date of the merger. The surviving HHA (Agency B) should provide a Start of Care (SOC) comprehensive assessment for all persons it admits after the merger at the next skilled visit after the official merger date. The SOC assessment will allow eligibility for the home health benefit to be verified and care planning for the individual to proceed under Agency B. Subsequently, the assessments for all individuals being accepted for care by Agency B will be linked to the correct provider number to enable the agency to engage in quality improvement efforts with accurate OBQI reports. In accordance with §489.18 and §3210, when there is a permissible change in ownership under §424.550(b)(2), as described below and the new owner does not reject automatic assignment of the existing provider agreement under §489.18(c), the new owner is subject to all the terms and conditions under which the existing agreement was issued, including compliance with the comprehensive assessment of patients condition of participation. The CCN remains the same if the new HHA owner accepts assignment of the existing provider agreement. The new owner is responsible for continuing to complete updates to the comprehensive assessment at the next scheduled time points. Change of Ownership without Assignment In accordance with §489.18 and §3210, when there is change of ownership and the new owner rejects this automatic assignment of the provider agreement, the provider agreement and provider number of the former owner should be terminated. The HHA that is terminating its provider agreement and provider number should provide an OASIS discharge comprehensive assessment for each patient subject to OASIS standards prior to the effective date of the termination, according to §484. The new HHA will not be able to participate in the Medicare program without going through the same process as any new provider, which includes an initial survey. The HHA should meet all the Federal requirements, including applicable OASIS requirements as specified in the regulations, for all persons it accepts for care in order to participate in the Medicare program. This means that the HHA should provide a new SOC comprehensive assessment at the first skilled visit once it becomes Medicare-approved. In addition, updates to the comprehensive assessment should be provided at the other OASIS time points, in accordance with §484, for all patients of the former owner it accepts for care. NOTE: The “Medicare Program; Home Health Prospective Payment System Rate Update for Calendar Year 2011; Changes in Certification Requirements for Home Health Agencies and Hospices; Final Rule”(75 FR 70372) (also referred to as CMS-1510-F) published on November 17, 2010, revised certain policies related to the prohibition of the sale or the transfer of HHA billing privileges at §424.550(b)(1), defined “change in majority ownership” at §424.502, and provided several exceptions to the new “36-month rule.” Specifically, the final rule provided that, effective January 1, 2011, and in accordance with §424.550(b)(1), if there is a change in majority ownership of an HHA by sale (including asset sales, stock transfers, mergers, and consolidations) within 36 months after the effective date of the HHA’s initial enrollment in Medicare or within 36 months after the HHA’s most recent change in majority ownership, the provider agreement and Medicare billing privileges do not convey to the new owner. Section §424.502 defines the term “Change in Majority Ownership” as a transaction in which an individual or organization acquires more than a 50 percent direct ownership interest in an HHA during the 36 months following the HHA's initial enrollment into the Medicare program or the 36 months following the HHA's most recent change in majority ownership (including asset sales, stock transfers, mergers, and consolidations). This includes an individual or organization that acquires majority ownership in an HHA through the cumulative effect of asset sales, stock transfers, consolidations, or mergers during the 36-month period after Medicare billing privileges are conveyed or the 36- month period following the HHA's most recent change in majority ownership. If the CMS RO or SA receives an inquiry from the provider regarding procedures for a change in majority ownership pursuant to §424.550(b) (1), it should refer the provider to its Medicare Administrative Contractor (MAC). The MAC will review the applicable time frames, exceptions and any other pertinent enrollment requirements, and will determine if the facility has had a majority ownership change within 36 months of its initial certification or within 36 months of another majority ownership change. If the proposed HHA change of ownership meets the revised HHA change in majority ownership definition, it must: • Enroll in the Medicare program as a new (initial) HHA under the provisions of §424.510; • Obtain a State survey or an accreditation from an approved accreditation organization with deeming authority; and • Sign a new Medicare provider agreement and receive a newly assigned CMS Certification Number (CCN). CMS will deactivate the HHA’s old Medicare billing number if the sale has already occurred. Scheduling of an initial certification survey is initiated by a recommendation from the MAC to the RO/SA. The SAs and ROs will follow the current established processes and policies for initial certification. The initial surveys required under the change in majority ownership guidelines will be considered Tier IV as per CMS’s Mission Priority Document (MPD). The HHA may utilize an approved AO for an initial survey if it is seeking deemed status through accreditation. It is the responsibility of the HHA to arrange the initial Medicare survey with the AO. Upon successful completion of the enrollment and survey process, the new HHA will have a new effective date of Medicare participation and a new CCN. Questions from the provider community about the definitions for a change in majority ownership and specifics regarding participation dates, exceptions, etc., should be directed to the applicable MAC. An existing HHA that has engaged in a transaction that meets the definition of change in majority ownership is considered to have voluntarily terminated its participation under its original provider agreement. The requirements for a provider/supplier to terminate voluntarily from participation in the Medicare program are set forth at §489.52. The RO should follow the usual procedure regarding voluntary termination, using the date of the ownership change as determined by the MAC as the effective date of voluntary termination. There are a four allowable exceptions to the sale or transfer prohibition at §424.550(b)(2). Specifically, the provisions of §424.550(b)(1) do not apply if: • The HHA submitted two consecutive years of full cost reports (which are not low utilization or no utilization cost reports); • The HHA parent company is undergoing an internal corporate restructuring, such as a merger or consolidation; • The owners of an existing HHA are changing the HHA’s existing business structure and the owners remain the same; or • An individual owner of an HHA dies. Note: §424.550(b)(1) does not apply to “indirect” changes in majority ownership (e.g., changes to the ownership of a holding company that owns and operates HHAs through subsidiaries). Voluntary Terminations In accordance with §489.52 and §2005 and §3046, a Medicare approved HHA may voluntarily terminate its provider agreement by filing a written notice of its intention to the State Agency who, in turn, notifies the RO. The provider/supplier must also submit a Form CMS-855A or CMS-855B to voluntarily terminate its Medicare billing privileges. . NOTE: According to Pub. 100-08, chapter 10, section 7.3: In the event the HHA notifies the MAC of its intent to voluntarily terminate, the MAC shall notify the State and RO. This notification can be made via letter, e-mail, or fax, no later than 3 business days after the contractor has finished processing the termination. CMS recommends that an HHA provide a discharge comprehensive assessment for each patient prior to the effective date of the termination of its provider agreement. The former HHA that meets the 2010 revised HHA CHOW definition is considered to have voluntarily terminated the original provider agreement. The State should follow usual procedures regarding voluntary termination, using the date of the CHOW as the effective date of voluntary termination. Electronic communication with the MAC should occur between all interested parties. Involuntary Terminations The RO may terminate the provider agreement with an HHA, in accordance with §489.53. Revocation of billing privileges in the Medicare program may be initiated by the MAC at §424.535, which results in termination of the provider agreement. When revocation of billing privileges also results in the termination of a corresponding provider agreement, the provider may appeal CMS’s decision under §498, where a final decision applies to both the billing privileges and the provider agreement. See §424.545. CMS will work with the HHA on a case-by-case basis to provide for the safe and orderly transfer of patients to another Medicare-approved HHA if appropriate. Deactivation of billing privileges Under §424.540, a provider or supplier who does not submit any Medicare claims for 12 consecutive calendar months will have its Medicare billing privileges deactivated. The 12 month period begins on the 1st day of the 1st month without claims submission through the last day of the 12th month without a submitted claim. Deactivated agencies are not terminated and are still required to be surveyed every 36 months by the SA or AO, if deemed. Effective January 1, 2010, if an HHA’s billing privileges are deactivated, the HHA must also undergo a Medicare survey in order for its billing privileges to be reactivated. This applies to all applications for reactivation that were received after December 31, 2009. In order for its billing privileges to be reactivated, a HHA must first submit a Form CMS- 855 update (re-activation application) to the MAC. The MAC will conduct its preliminary review of the application and either deny the application or notify the RO, AO or SA that a survey may be scheduled. The MAC will notify the provider that the preliminary review is complete and that the SA has been notified. Once the RO/SA receives notification from the MAC, surveys of deactivated HHAs are scheduled as a low survey priority. In circumstances of demonstrated access to care issues, the RO may change the survey priority and determine if an earlier recertification survey is indicated. If an HHA chooses to have a deemed status survey by an AO, it is the responsibility of the HHA to arrange the Medicare recertification or initial survey with the AO. The AO shall perform a recertification survey for existing clients when billing privileges have been deactivated and the agency has subsequently requested reactivation. In the event the HHA wishes to use the AO to conduct a reactivation survey when it formerly was under the jurisdiction of the SA, the AO would conduct this as an initial survey. The AO must notify the RO of the survey findings and the deeming recommendation. The RO retains the responsibility to notify the MAC that the agency passed the requirements of the Medicare survey. A standard survey is conducted and entered into the ASPEN system as a recertification survey along with a note that this is an early recertification due to a request for reactivation of Medicare billing. The SA must notify the RO of the survey activity. If the survey finds condition level non-compliance, routine enforcement procedures should be followed. If the survey finds substantial compliance, the RO should forward Form CMS- 2007 to the MAC with the date the provider was determined to be in compliance with the CoPs in the remarks section. The HHA will retain its existing CMS CCN.