Comments on: CMS Admits New CHOW Rule May Force 2,000 Home Health Agency Closures

By: Tim Rowan

Tim Rowan — Fri, 07 Jan 2011 19:58:10 +0000

This article, published in February of last year, was referring to Transmittal 318, which was withdrawn after pressure from home care associations who found its provisions overkill to accomplish CMS’s intended results.

By: Kate

Kate — Thu, 06 Jan 2011 23:39:44 +0000

I have a question about Unintended Consequence #2. When you stated “CMS issued an interpretation that includes all ownership transfers..” were you referring to the (now rescinded) Transmittal 318 or to another piece of CMS interpretive guidance?

By: Tim Rowan

Tim Rowan — Wed, 22 Dec 2010 17:47:46 +0000

You have moved into a legal technicality area that is beyond the expertise of this blog’s staff. I strongly encourage you to seek advice from an attorney who is familiar with Medicare regulations. Perhaps a phone call to the National Association, if you are a member, would be helpful.
Tim

By: ron

ron — Sun, 19 Dec 2010 00:27:09 +0000

I would like to buy an HHA that was medicare certified in the last 60 days. I would be buying an there existing corporation through a stock purchase. My understanding is the Medicare reverted to there 2009 rules in July 2010 as it relates to stock transfers and that this transaction would not be a change of ownership but a change of information and that it would be allowed. I would be able to bill Medicare right away. Is that correct? Additionally, do you know if I put the change of information in before the end of the year will it fall under the 2010 rules even if they do not finish processing the from until January 2011?

By: Tim Rowan

Tim Rowan — Wed, 01 Dec 2010 23:15:04 +0000

Monty,
Frankly, there are far too many home health agencies in Florida already. Starting a new one will take the same amount of time as re-applying for Medicare billing status after acquiring an existing one less than 3 years old. It will also meet with unprecedented resistance from state regulators. The best advice is to find one to buy so that you do not add to the total number and make an already bad situation worse. If you talk to the Home Care Association of Florida and a reputable mergers and acquisitions broker such as The Braff Group, you will eventually find someone ready to retire who has held their certificate for longer than 36 months. A good M&A advisor can also guide you should you identify an agency to buy that does not quite meet the 36-month limit.

By: monty

monty — Tue, 23 Nov 2010 00:10:57 +0000

I have been looking for a home health agency in Florida region 3 to buy and grow but this new 36 month rule has limited the opportunities available. What is the best way to start a new company and complete the medicare certification process. How long does the application process take. Do you have any recommendations for consulting companies to help me with the process?

By: Tim Rowan

Tim Rowan — Wed, 08 Sep 2010 15:09:25 +0000

Cristy,
I do not offer legal advice but to the best of my knowledge the rule only affects Medicare-certified agencies. If your ownership change occurs prior to your agency receiving permission to send claims to Medicare it does not start the 36-month clock. The clock starts the day you become certified. If the ownership transfer occurs after certification, that might be considered two ownership changes within 36 months.
Tim

By: Cristy

Cristy — Tue, 07 Sep 2010 03:23:02 +0000

We are a new agency. We are not certified yet but had been waiting to have 7 patients to be able to have the JCAHO survey. Three of the partners wanted to quit and the two partners wanted to buy them out. Are we affected by this? We are not Medicare orJCAHO certified yet.

By: Tim Rowan

Tim Rowan — Thu, 29 Jul 2010 17:04:38 +0000

Cynthia,
I have hesitated to reply because this takes me clearly into the arena of giving legal advice, which I am not qualified to do. See my response to Hilda. The definition of what constitutes a CHOW for purposes of determining whether a new owner must re-apply for permission to send claims to Medicare has reverted to what it was before CMS’s November directive. The illicit ruling that a 5% transfer constitutes a CHOW has been rescinded but you must get legal counsel to sort out your 50/50 situation.

By: Tim Rowan

Tim Rowan — Thu, 29 Jul 2010 17:00:04 +0000

Hilda,
Responding to industry pressure, in July CMS rescinded portions of its rule that went beyond what Congress and its own previous rules had authorized it to do. While I strongly urge you to seek legal advice before taking any action, I can state what it seems to say now. If a certified HHA changes ownership twice within three years, the new owner must re-apply for permission to submit Medicare claims. That did not change in July. What changed is that the definition of what constitutes a CHOW reverted to CMS’s own previous definition that was in effect before its November 2009 rule. That rule arbitrarily redefined a CHOW as any transfer of 5% or more of company stock, which Congress did not ask CMS to do. You need to get legal advice on exactly what constituted a CHOW prior to November.