CMS Pub. 100-16, ch. 12, § 30.4

As described in §20.4, the entity with a Medicare contract must submit the proposed or

pending change of ownership transaction to CMS and work with CMS through the

review and novation agreement acceptance process.

Based on the MA organization’s proposed transaction, CMS will inform the MA

organization if a novation will be required. If a novation is required, CMS will notify the

MA organization currently holding the Medicare contract(s) about the required

documents, information and/or State approvals it must submit to CMS. The organization

must also submit a draft novation agreement, detailing any proposed modifications to the

Model Novation agreement.

If, as indicated in CMS guidance found in Chapter 11 of the Managed Care Manual,

“Medicare Advantage Application Procedures and Contract Requirements,” a Service

Area Expansion or initial application is required on the part of the transferee entity prior

to the approval of the novation of the contract(s), the RO Account Manager will inform

the transferee as well as the transferor.

Exhibit 1 - Model Novation Agreement

(Rev. 113, Issued: 05-17-13)

(Name of Medicare Managed Care Plan or Medicare Advantage Organization being

transferred) (Transferor), d.b.a. (Where applicable, the d.b.a. name), a corporation,

partnership, sole proprietorship, etc., duly organized and existing under the laws of the

State of (indicate the State under which the Transferor is formed or organized to operate)

with its principal office in (City and State where principal office is located); (Name of

new owner) (Transferee), a corporation, partnership, sole proprietorship, etc. duly

organized and existing under the laws of the state of (State), with its principal office in

(City and State where principal office is located) and the Centers for Medicare &

Medicaid Services (CMS) enter into this Agreement:

(A) RECITALS:

(1) CMS has entered into certain contract(s) with the Transferor, namely:

(Indicate Medicare Managed Care Plan and Medicare Advantage Organization contract

type, as well as Medicare contract number (H#(s)) The term "the contract(s)" as used in

this Agreement, means the above contract(s) including all modifications, made between

CMS and the Transferor before the effective date of this Agreement (whether or not

performance and payment have been completed) and releases executed if CMS or the

Transferor has any remaining rights, duties, or obligations under these contract(s).

Included in the term "the contract(s)" are also all modifications made under the terms and

conditions of these contract(s) between CMS and the Transferee, on or after the effective

date of this Agreement.

(2) As of (effective date of ownership change), the Transferor has transferred to the

Transferee all the assets of the Transferor by virtue of a (indicate the type of transfer, i.e.,

a merger, corporate reorganization, or an agreement and purchase of the sale of assets)

between the Transferor and the Transferee.

(3) The Transferee has assumed all the assets of the Transferor by virtue of the above

transfer.

(4) The Transferee has assumed all the obligations of the Transferor under the contract(s)

by virtue of the above transfer.

(5) The Transferee has indicated a desire to assume the obligations of the Transferor

under the contract(s) and to fully perform all obligations that may exist under the

contract(s).

(B) IN CONSIDERATION OF THESE FACTS THE PARTIES AGREE AS

FOLLOWS:

(1) The Transferor confirms the transfer of the contract to the Transferee, and waives any

claims and rights against CMS that it now has or may have in the future in connection

with the contract(s).

(2) As of the effective date of the change of ownership in § (A)(2), above, the Transferee

agrees to be bound by and to perform all the duties and responsibilities of Transferor in

each contract in accordance with the conditions contained in the contract(s). The

Transferee also assumes all obligations and liabilities of, and all claims against the

Transferor under the contract(s).

(3) The Transferee ratifies all previous actions taken by the Transferor with respect to the

contract(s) with the same force and effect as if the action had been taken by the

Transferee.

(4) CMS recognizes the Transferee as the Transferor's successor in interest in and to the

contracts. As of the effective date of the change of ownership the Transferee by this

Agreement becomes entitled to all rights, title, and interests of the Transferor in and to

the contract(s). Following the effective date of this Agreement, the terms "Organization"

and "Contractor" as used in the contract(s) shall refer to the Transferee.

(5) Except as expressly provided in this Agreement, nothing in it shall be construed as a

waiver of any rights of CMS against the Transferor. Notwithstanding any other provision

of this Agreement, the Transferor remains liable for all acts constituting a breach of the

contract(s) occurring or arising before the effective date of the change of ownership, to

the fullest extent of applicable laws and regulations.

(6) All payments and reimbursements previously made by CMS to the Transferor shall be

considered to have discharged CMS's obligations under the contract(s). All payments

and reimbursements made by CMS after the effective date of this Agreement in the name

of or to the Transferee, shall have the same force and effect as if made to the Transferor,

and shall constitute a complete discharge of CMS's obligations under the contract(s) to

the extent of the amounts paid or reimbursed.

(7) The Transferor and the Transferee agree that CMS is not obligated to pay or

reimburse either of them for, or otherwise give effect to, any costs, taxes, or other

expenses, or any related increases, directly or indirectly arising out of or resulting from

this Agreement other than those that CMS in the absence of this Agreement would have

been obligated to pay or reimburse under the terms of the contract(s).

(8) The contract(s) shall remain in full force and effect except as modified by this

Agreement. Each party has executed this Agreement, which is effective as of the date

signed below by the Centers for Medicare & Medicaid Services.

(9) Each party certifies and warrants that it has full power and authority to enter into this

Agreement.

(10) Each person executing this Agreement on behalf of a party certifies and warrants

that he or she is authorized to enter into this Agreement on behalf of such party.

Centers for Medicare & Medicaid Services By ______________Date________________

(Name of Transferee) ________________________________Date___________

Title____________________________________________

(Name of Transferor) By ________________________________Date____________

Title____________________________________________