Hospice Billing

Hospice Change of Ownership

Table of Contents

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Hospice Change of Ownership

CHOW is defined in 42 CFR 489.18 (a) and generally means, in the case of a partnership, the removal, addition or substitution of a partner, unless the partners expressly agree otherwise, as permitted by applicable state law. In the case of a corporation, the term generally means 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.

A hospice CHOW is when a change of ownership takes place, and the PTAN changes. There are certain steps that have to be followed in order for claims to process for dates of service on or after the effective date of the change.

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What is Not a CHOW

  • A CHOW in hospice does not constitute a beneficiary change (transfer from one hospice to another). Only the beneficiary can elect to change hospices, this is known as a transfer.
  • The transfer of corporate stock or the merger of another corporation into the provider corporation does not constitute change of ownership

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The Provider Enrollment Process

The provider enrollment process for a CHOW must be completed before any changes can be made to the billing process.

The enrollment process is considered to have been completed when the provider enrollment records are updated to reflect the change as noted in the tie-in notice from CMS, and National Government Services notifies the provider by way of a letter of the update made to the enrollment records. Upon receipt of the letter from National Government Services advising of the updates made to the enrollment record, the agency should proceed to ensure that all electronic billing records through the EDI are also updated, if applicable.

In most cases, the processing of the CHOW enrollment application will have been completed subsequent to the actual effective date of the change. Depending upon the nature of the change, there may be certain actions required to update the beneficiary’s hospice enrollment records on the CWF. Below are the most common situations that National Government Services experiences as part of a CHOW with hospice agencies.

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Purchase Agreement

  • Buyer retains the PTAN and NPI of the existing agency
  • Buyer retains the PTAN, but changes the NPI
  • Buyer changes PTAN and NPI

In all situations, ensure beneficiaries on service have been notified that a change of ownership has taken or will take place. For situations where the PTAN changes, the CWF has to be updated with the new PTAN to allow claims and notices to process for dates of service on or after the effective date of the change.

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Merger/Acquisition

Mergers and acquisitions may encompass a purchase agreement, but can also include situations where an agency is consolidating multiple locations.

Mergers or acquisitions that take place among one or more hospices may result in the change of the PTAN and/or the NPI.

When a consolidation takes place, the actual owners of the agency do not change, but the PTAN and/or NPI changes. The most common consolidation situations are:

  • Agency elects to keep all NPIs of the locations they will consolidate but keep only one PTAN; the enrollment records for all the locations they no longer want are terminated when the CHOW is finalized and the NPIs are then associated with the remaining PTAN.
  • Agency elects to terminate the PTANs and NPIs of the locations they will consolidate and keep only one PTAN/NPI combination; the enrollment records for all other PTANs and NPIs will be terminated when the change is approved.

Regardless of the reason for a change to the PTAN, the chart below can be used to determine what action, if any, should be taken with respect to billing.

Step Situation Yes No Action Required
1 PTAN changed as part of the CHOW process.

 		 X   Go to Step 2 or 3.
  X Billing continues as normal. If the change is due to a purchase agreement, the buyers and sellers make an agreement as to who will be responsible for billing until the CHOW is processed.
2
 		 Beneficiary admitted to hospice before the effective date of the change and remains on hospice after the effective date of the change. X   If the change is due to a consolidation, billing of the claims continue under the existing PTAN until the CHOW is processed.

If the change is due to a purchase agreeement (including a merger), billing continues with the seller/existing agency until the CHOW is processed.

Once the CHOW is processed, any claims filed after the date of the change must be canceled. The 8XE is submitted to identify the change on CWF and subsequent claims are resubmitted.

For instructions on submitting the 8XE, refer to the Notice of Change of Ownership (TOB 8XE) job aid.
  X Go to Step 3.
3
 		 Beneficiary admitted to hospice care of transferred to agency on or after the effective date of change, but before the CHOW was processed. X  
  • If the change is due to a consolidation, submission of the NOE and billing continues under existing PTAN until the CHOW is processed.
  • If the change is due to a purchase agreement (including a merger), submission of the NOEs and billing continues with the seller until the CHOW is processed.
  • Once the CHOW is processed, go to Step 4.
  X No action necessary.
4 Any notices of election (8XA), notices of change (8XC) and/or claims submitted under PTAN that was changed or terminated. X   Once CHOW is processed and the enrollment records are updated, the existing agency or buyer must do the following:
  • Cancel any 8XA, 8XC and or claims that were submitted with dates of service on or after the effective date of the change.
  • Ensure that all benefit periods are also canceled on the CWF.
  • After all 8XA, 8XC notices, claims and benefit periods are canceled on the CWF, the buyer resubmits to correct the PTAN on the CWF.
Note: NOEs that are processed under the new PTAN are subject to the NOE timely filing edits. When the subsequent claims are filed, ensure that remarks are entered to clearly state that the reason for the late filing is related to the processing of the CHOW. The remarks should include the date of the "Welcome" letter from National Government Services and the date that the EDI agreement was completed.