Last updated: November 2026
A Medicare change of ownership (CHOW) is a deal that 42 CFR 489.18 treats as moving a provider's Medicare agreement to a new owner; 42 CFR 424.550 requires both owners to submit enrollment applications before it is completed. Home health agency (HHA) and hospice deals face two more tests: a 36-month rule on changes in majority ownership, and, while it lasts, a CMS enrollment moratorium that took effect May 13, 2026. Integral Healthcare Solutions (IHS) is a consulting firm that drafts the transaction checklist, the enrollment-change packet and the post-close compliance calendar for buyers, sellers and their counsel.
What is a Medicare change of ownership?
A Medicare change of ownership is defined by the deal's structure, not its label. We read the cited sections in the official eCFR text on November 5, 2026.
Which transactions count
42 CFR 489.18 paragraph (a) sorts deals by entity type:
- Partnership: removing, adding or substituting a partner is a change of ownership "unless the partners expressly agree otherwise, as permitted by applicable State law."
- Unincorporated sole proprietorship: transfer of title and property to another party.
- Corporation: "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 constitutes change of ownership. Transfer of corporate stock or the merger of another corporation into the provider corporation does not constitute change of ownership."
- Lease: a lease of all or part of a facility, for the leased portion only (paragraphs (a)(4) and (e)).
What the buyer inherits and what each side files
Unless it refuses assignment, the buyer inherits the agreement and its conditions: paragraph (c) assigns the existing agreement to the new owner automatically when there is a change of ownership as paragraph (a) specifies, and under paragraph (d) it stays subject to applicable statutes, regulations and its original terms, "including, but not limited to," any existing plan of correction, health and safety standards, ownership and financial interest disclosure and civil rights requirements. A refusal goes to CMS in writing 45 calendar days before the change, and the buyer then participates only as a new provider (CMS State Operations Manual, section 3210.5A).
Both sides file. The provider must notify CMS while contemplating or negotiating the deal (489.18(b)). Under 42 CFR 424.550 paragraph (b), both owners submit enrollment applications before completion; a current owner that does not "may be sanctioned or penalized, even after the date of ownership change"; and if the new owner does not submit "within 30 days of the change of ownership, CMS may deactivate the Medicare billing number." 42 CFR 424.516 paragraph (e)(1) has providers not named in its paragraphs (a) through (d) report a change of ownership or control, including of authorized or delegated officials, within 30 days. Paragraph (g) adds governance and ownership disclosures for a skilled nursing facility at initial enrollment, which there includes a change of ownership under 489.18.
The 36-month rule for home health agencies and hospices
An HHA or hospice sold too soon does not pass its agreement to the buyer. Under 424.550(b)(1), unless a (b)(2) exception applies, a change in majority ownership by sale (including asset sales, stock transfers, mergers and consolidations) "within 36 months after the effective date of the HHA's or hospice's initial enrollment in Medicare or within 36 months after the HHA's or hospice's most recent change in majority ownership" means the agreement and billing privileges "do not convey to the new owner." The new owner must both enroll as a new (initial) HHA or hospice and obtain a State survey or an accreditation from an approved accreditation organization. 42 CFR 424.502 defines the change as acquiring "more than a 50 percent direct ownership interest," including cumulatively. Exceptions: two consecutive years of full cost reports (not low or no utilization reports) since initial enrollment or the last majority change, whichever is later; an internal restructuring of the parent company; a change of business structure with the same owners; and an individual owner's death.
How the 2026 moratorium affects a home health or hospice CHOW
A buyer caught by the 36-month rule must enroll as new, and new applications are denied during the moratorium. The CMS Provider Enrollment Moratoria page says "The moratorium applies to initial applications. This includes non-exempt changes in majority ownership (CIMOs) under 42 CFR 424.550(b)." CMS's notices treat that buyer's enrollment as an initial enrollment (91 FR 27959 for HHAs; 91 FR 27952 for hospices). 42 CFR 424.570 exempts ownership changes "except changes in ownership of home health agencies that would require an initial enrollment."
The CMS memorandum QSO-26-11-HHA and Hospice (May 20, 2026) says applications the Medicare contractor received before May 13, 2026 continue to be processed, and a prospective agency's accreditation will not serve as the basis for deemed status during the moratorium. CMS's moratorium questions and answers (revised 7/09/26) say enrolled providers can still acquire and merge with each other if no change in majority ownership requires a new enrollment and no new locations are added.
Duration and status. Both notices set 6 months from May 13, 2026, and 424.570(b) allows 6-month extensions if CMS deems it necessary, announced in the Federal Register. Six months from May 13 is November 13, 2026, which is IHS arithmetic, not a CMS statement. As of November 5, 2026, the CMS page (last modified 08/27/2026) still states the 6-month term, and we found no extension or lifting notice in Federal Register issues from October 15 through November 5. Check both.
Who needs it and what triggers it
Buyers and sellers of Medicare-enrolled providers need this once a deal is in view. Triggers: a letter of intent or purchase agreement, and any HHA or hospice deal inside the 36-month window.
How IHS helps
IHS builds the paperwork that tracks every filing a deal requires. Thomas G. Goddard, JD, PhD, leads the work:
- Map the deal to 489.18(a) and, for an HHA or hospice, to 424.502 and the exceptions, as questions for counsel.
- Build a dated checklist: notice to CMS, both filings, the 30-day window, the 36-month test.
- Review inherited obligations: plan of correction, survey history.
- Draft the enrollment-change packet for the parties to sign and file.
- Write a post-close calendar with an owner per item, including the seller's final claims plan.
What you supply. Purchase documents, enrollment and survey history, disclosure information and signatures.
The real limit. IHS cannot say how CMS or a Medicare contractor will treat a deal; the parties file what IHS drafts.
What to have ready
Each item ties to the rules above:
- The deal structure in writing, matched to 42 CFR 489.18 paragraph (a), and the date CMS was notified.
- Both owners' enrollment records, since both file before completion (42 CFR 424.550).
- For an HHA or hospice, the initial enrollment effective date, any majority change in the last 36 months, and cost report history (424.550(b)(1) and (b)(2)(i)).
- A current check of moratorium status with CMS and the Federal Register (424.570(b) and (d)).
- The seller's plan of correction and survey findings (489.18(d)(1)).
- For a skilled nursing facility, the 42 CFR 424.516 paragraph (g) disclosure information.
- A final claims plan for the seller, given 42 CFR 424.540.
The free introductory call turns this list into a working checklist.
How it compares
The table records rule text only.
| Structure or sector | What the text says |
|---|---|
| Stock transfer, or another corporation merging into the provider | Not a change of ownership under 489.18(a)(3); for an HHA or hospice it can still be a change in majority ownership (424.502, 424.550(b)(1)) |
| HHA or hospice majority change inside 36 months, no exception | Agreement and billing privileges do not convey; new enrollment plus survey or accreditation (424.550(b)(1)), denied during the moratorium (CMS moratoria page) |
| HHA or hospice majority change after 36 months | Does not, in general, make the agency new (CMS moratorium questions and answers, Q11) |
What it costs
The cost has three parts. Authority fees: under 42 CFR 424.514, an institutional provider's initial enrollment application, including an HHA or hospice new enrollment under the 36-month rule, carries the application fee CMS sets each calendar year, a hardship exception request, or both. Verify current fees with CMS. Consulting: IHS scopes each engagement after a free introductory call. Internal staff time: each side's enrollment and billing leads work the filings.
What this is not
- It is not legal advice. IHS is a consulting firm, not a law firm; counsel decides how these rules apply to a deal.
- IHS does not notify, call or file with CMS or a contractor.
Frequently asked questions
What transactions count as a Medicare change of ownership?
Under 42 CFR 489.18, "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" is one; a transfer of corporate stock, or another corporation merging into the provider, is not. A partner change counts unless the partners expressly agree otherwise, as State law permits; a lease counts for the leased portion.
What happens to the Medicare provider agreement when ownership changes?
When there is a change of ownership as 489.18(a) defines it, "the existing provider agreement will automatically be assigned to the new owner" (42 CFR 489.18, paragraph (c)). The new owner takes it, with its original terms, unless it refuses assignment in writing 45 calendar days before the change (CMS State Operations Manual, section 3210.5A).
Who has to file, and when?
The provider must notify CMS while contemplating or negotiating the deal (489.18(b)). Then "the current owner and the prospective new owner must complete and submit enrollment applications before completion of the change of ownership" (42 CFR 424.550, paragraph (b)).
What happens if the buyer does not file within 30 days?
If the new owner does not submit its application within 30 days of the change of ownership, CMS may deactivate the Medicare billing number (42 CFR 424.550, paragraph (b)). A provider "may not receive payment for services or items furnished while deactivated under this section" (42 CFR 424.540, paragraph (e)).
What is the 36-month rule for home health agencies and hospices?
Unless a (b)(2) exception applies, when an HHA's or hospice's majority ownership changes by sale, stock transfers included, within 36 months after the effective date of its initial enrollment in Medicare or after its most recent change in majority ownership, the agreement and billing privileges do not convey. The new owner must enroll as new and obtain a State survey or an accreditation from an approved accreditation organization (42 CFR 424.550, paragraph (b)(1)).
Does the 2026 moratorium affect a home health or hospice purchase?
Yes, while it lasts, when the deal is a non-exempt change in majority ownership inside the 36-month window: CMS says such applications submitted after the moratorium began "will be denied" (CMS Provider Enrollment Moratoria page). "CMS regulations do not permit exceptions to a moratorium for individual providers or suppliers" (CMS memorandum QSO-26-11-HHA and Hospice).
Does the seller have anything left to do after closing?
Yes. A seller that does not file may be sanctioned or penalized even after the date of ownership change (42 CFR 424.550, paragraph (b)). As the seller in an HHA, hospice or DMEPOS supplier change of ownership under 424.550(b)(1), it may have its billing privileges deactivated effective the date of the sale (42 CFR 424.540, paragraphs (a)(8) and (d)), so the seller needs a final claims plan.
What does IHS draft, and what do the parties supply?
IHS drafts the checklist, the inherited-obligations review, the enrollment-change packet and the post-close calendar. The parties supply documents and signatures and file; counsel decides structure.