CHOW Provisions – State Operations Manual – SOM 3210.1
CHOW Provisions – State Operations Manual – SOM 3210.1 – Determining Ownership
For certification and provider agreement purposes, the authorized official is an individual (such as independent practitioner or sole proprietor) or an appointed official (including, but not limited to, an officer, director, manager, general partner, limited partner, etc.) of a legal entity such as a corporation or general partnership who is directly responsible for the business enterprise and has been granted the legal authority to enroll it in Medicare, to make changes and/or updates to its status in the Medicare program, and to commit it to fully abide by the laws, regulations and applicable program memoranda and manual issuances of the Medicare program. This party is legally responsible for decisions and liabilities in a business management sense. The same party also bears the final responsibility for operational decisions made in the capacity of a “governing body” and for the consequences of those decisions.
Whether the owning party owns the provider enterprise premises or rents or leases them from a landlord or lessor is immaterial. Of course, if the owner enters into an agreement that allows the “landlord” to make or participate in decisions about the ongoing operation of the enterprise, this indicates that the owner has entered into either a partnership agreement or a management agency agreement instead of a property lease. A new partnership agreement constitutes a CHOW.
To determine ownership of any provider enterprise or organization, the SA determines which party (whether an individual or legal entity such as a partnership or corporation) has immediate authority for making final decisions regarding the operation of the enterprise and bears the legal responsibility for the consequences of the enterprise’s operations.
CHOW processing is necessary for program participants that have Health Benefit Agreements or Provider Agreements in the Medicare program (hospital, SNF, HHA, hospice, CORF, OPT/SP providers and CMHC) because it must be determined who the responsible party is under the agreement. For the same reason, CHOW processing is necessary for supplier participants that have category-specific agreements with the Secretary (RHC, ASC, and FQHCs) or that must file cost reports (e.g., ESRD facilities).
Somewhat less extensive CHOW processing is necessary for the remaining supplier types without agreements or cost report requirements (e.g., PXR) to ensure compliance with the statutory requirement for ownership disclosure and to ensure that the program has current, accurate records regarding participants.
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Tags: Change of Ownership, CHOW