CMS Pub. 100-06, ch. 3, § 130

Referral Process

(Rev. 13235; Issued: 05-22-25; Effective: 06-23-25; Implementation: 06-23-25)

When a provider undergoes a CHOW where the new provider accepts assignment of the previous

owner’s Medicare agreement, the responsibility for repaying any outstanding and future overpayments

resides with the new owner. Exception: If any of the overpayments determined for a fiscal year when

the previous owner had assignment were discovered due to fraud, the responsibility for the repayment of

the overpayments does not shift to the new provider. It stays with the old provider. A sales agreement

stipulating that the new owner is not liable for the overpayments made to the previous owner is not

evidence enough for recovery from the new owner to not occur. Medicare was not a part of the sales

agreement. That is a civil matter, and it would be up to the new owner to enforce the sales agreement. If

the new owner assumes assignment of the Medicare agreement, Medicare will attempt to recover from

the new/current owner regardless of the sales agreement. The Contractor attempts collection from the

new owner. If this is not successful and the Contractor has reasonable evidence that the previous owner

can repay the overpayment it should refer the case to the RO. The RO will confer with the Office of

General Council (OGC) and decide if the case warrants collection from the previous owner. This action

should be completed before the debt is transferred to the Department of Treasury.

The primary source for information on Change of Ownership (CHOW) is located in the Centers for

Medicare & Medicaid Services (CMS) State Operations Manual (SOM), Publication 100-07, Chapters 2

and 3. Please refer to that manual for any subsequent update on the information in this section.

When the owner of a Part A Medicare provider agreement transfers the provider rights to a new owner,

(by sale, lease or other transaction), Medicare regulations state that the provider agreement is

automatically assigned to the new owner. Refer to 42 C.F.R. § 489.18(c). Such a transfer is called a

“Change of Ownership” (CHOW). A CHOW allows the provider’s participation in the Medicare

program to continue without any break in coverage.

However, if the new owner chooses to reject assignment of the provider agreement, the old owner’s

provider agreement terminates, and the new owner must apply to the CMS for certification as a new

Medicare Provider. This is not a “CHOW.” Just as any other new provider, this new provider is not

eligible for payment for services that it provided to beneficiaries before the date on which the CMS

approves its application to participate in Medicare. Refer to: 42 C.F.R. § 489.13(b).

For more information on payments during the CHOW processing period, refer to Program Integrity

Manual, CMS Publication 100-08, Chapter 10, § 5.5.2.5.