Updated Manual Guidelines for EFT Payments and Change of Ownership

In May of this year, the Centers for Medicare & Medicaid Services (CMS) issued a change request for the purpose of making revisions to the Electric Funds Transfer (EFT) Payments and CHOWs section of the “Medicare Program Integrity Manual.” The revisions explained that after a CHOW has been processed, only the buyer is permitted to submit claims.

A CHOW generally means, in the case of a partnership, the removal, addition or substitution of a partner, unless the partners expressly agree otherwise – and as permitted by the applicable state law.

For corporations, a CHOW generally means the merger of the provider corporation into another corporation, or the consolidation of two or more corporations, resulting in the creation of a new corporation. The transfer of corporate stock or the merger of another corporation into the provider corporation does not constitute change of ownership.

Change of Ownership (CHOW) Example

A common CHOW scenario is when an entity purchases a provider, and the provider’s CMS certification number and provider agreement are transferred to the entity.

For example, suppose that Beach Health Care is enrolled in Medicare but Mountain Health Care is not. If Mountain Health Care acquires Beach Health Care, then Beach Health Care’s provider agreement and certification number will transfer to Mountain Health Care, providing that all regulatory requirements are met. When a new owner accepts the provider agreement, it accepts the terms and conditions under which it was originally issued.

Importantly, old and new owners are responsible for working together on payment arrangements for claims furnished during and before the CHOW is processed. The Medicare Administrative Coordinator (MAC) won’t be able to update the crosswalk in order for the seller to complete their billing.

You can read more about this change in this special edition of MLN Matters. The official instruction issued to your MAC is available at this website.

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