Change of Ownership (CHOW) FAQs

A CHOW is constituted by (NCGS 108C):

1. In the case of a partnership, the removal, addition, or substitution of a partner, unless the partners expressly agree otherwise, as permitted by Chapter 59 of the General Statutes
2. In the case of a Limited Liability Company (LLC), the withdrawal or removal of a member, or when a person acquires a membership interest from the LLC or when a business entity converts or merges into the LLC pursuant to Chapter 57A of the General Statutes
3. In the case of an unincorporated sole proprietorship, the transfer of title and property of the provider that constitute the provider's business of providing services, goods, supplies, or merchandise to a Medicaid or Health Choice recipient to another party
4. 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. Transfer of corporate stock or the merger of another corporation into the provider corporation shall not constitute change of ownership. Merger of related provider corporations shall not constitute a change in ownership
5. The lease of all or part of a provider's facility that will continue to be utilized

It is allowable, however, providers are encouraged not to keep the previous owner’s NPI as this often causes complications which may lead to denial of claims and prior approvals.

Providers are encouraged to follow these guidelines:

1. The new owner should request a new NPI from NPPES and a new Tax Identification Number (TIN).
2. Once the new owner receives the new NPI and TIN, they should enroll that new NPI in NCTracks via an initial enrollment application. (Please note that it may take up to 30 days for the new NPI to transfer from the NPPES database and appear in NCTracks).
3. The new owner may complete an enrollment application as much as 365 days in advance of the effective date of the CHOW.
   • Completing the application in advance of the CHOW effective date allows ample time for the application to process and permits the new owner to begin billing once the CHOW is complete.
   • The new owner’s enrollment application may be submitted even while the previous owner is still practicing/billing.
4. The previous owner must terminate their NPI via a Manage Change Request (MCR). In the MCR, the previous owner must end date all active health plans (the end date should be the CHOW transaction date), and select “Provider Terminated due to change of ownership” as the reason for ending coverage. This may be done any time following the processing of the previous owner’s claims.
   • The seller is encouraged to submit the MCR 30 days prior to the CHOW transaction date. The MCR will not allow the health plans to be end dated with a retroactive date. The seller can only enter a current or future date when terminating health plans.

Note: If the previous owner is unable to terminate the record, the new owner can request to have the record terminated by submitting a written request and one of the following documents as proof of the CHOW:

• Bill of Sale
• Stock Transfer Agreement
• Letter relinquishing ownership from old owner
• Executed lease purchasing Agreement

Supporting documentation can be submitted to NCTracks via:

Fax #: 855.710.1965

E-mail: NCTracksprovider@nctracks.com

Mailing Address: CSRA, PO Box 300009 Raleigh, NC 27622-8009

If the previous owner is unable to terminate the record, the new owner can request to have the record terminated by submitting a written request and one of the following documents as proof of the change in ownership:

• Bill of Sale
• Stock Transfer Agreement
• Letter relinquishing ownership from old owner
• Executed lease purchasing Agreement

Supporting documentation can be submitted to NCTracks via:

Fax #: 855.710.1965

E-mail: NCTracksprovider@nctracks.com

Mailing Address: CSRA, PO Box 300009 Raleigh, NC 27622-8009

The same NPI can’t be active for two TINs. The seller must wait until all their outstanding claims have been processed by NCTracks prior to submitting an MCR for “Provider terminated due to change of ownership.” After the MCR is approved, the new owner should complete a new enrollment using the same NPI with the new TIN. After the enrollment is processed, billing can begin for the new owner. (This delay can be avoided by providers who obtain a new NPI.)

When the NPI is terminated by the seller, the original EFT information is no longer valid, so no additional claims can process, regardless of the dates of service. All outstanding claims should be paid prior to the seller terminating their NPI.

If the new owner is taking over the same NPI, the enrollment effective date for the new owner will have to be after the seller’s claims have been filed and processed. (The seller may continue to see patients up until the CHOW date.) This situation can be avoided for buyers who obtain a new NPI.

The seller must wait until all their outstanding claims have been filed and processed in NCTracks before submitting an MCR for “Provider terminated due to change of ownership.” The MCR review process can take four to six weeks to complete. Once the MCR is approved, the new owner must complete a new enrollment using the same NPI with the new TIN. New provider enrollment includes credentialing and backgrounds checks, and typically takes four to six weeks to complete. Only after the enrollment is completed can billing begin for the new owner. This delay can be avoided by providers who obtain a new NPI and enroll in advance of the CHOW.

On October 29, 2017, NCTracks automated the end-dating of existing seller PA records. NCTraks now systematically creates new PA records under the purchasing provider. However, some PA records require special handling under the automated CHOW process. Please see the Automation of Prior Approval Update with Change of Ownership announcement for more information.