CHOW Considerations for Medicare Chain Providers: The Importance of Knowing Your MAC

All Medicare providers must update their enrollment information to reflect changes in ownership (CHOWs) within 30 days after the CHOW.¹  Providers must report CHOWs to the applicable Medicare Administrative Contractor (MAC). Typically, a provider’s MAC is merely determined by the provider’s covered services and payment location.²  A/B MACs process Medicare Part A and Medicare Part B claims for a defined geographic area or jurisdiction.³  However, in certain circumstances, a provider’s MAC may not be the currently assigned contractor in their jurisdiction.

Medicare providers that are currently or were previously part of an approved chain of two or more providers under common ownership or control may be enrolled with and assigned to a MAC outside their jurisdiction.⁴  Chain providers may request and receive an exception to the traditional MAC assignment, and, upon CMS approval, may enroll with and bill on behalf of the eligible providers under its common ownership or common control to the MAC for the geographic locale in which the qualified chain provider’s home office is physically located.⁵  CMS also has authority to grant an exception to the traditional MAC assignments to eligible providers that are not under the common ownership or common control of a qualified chain provider, as well as ineligible providers, if CMS finds the exception will support the implementation of MACs or will serve some other compelling interest of the Medicare program.⁶

It is important for providers and investors to know their current MAC to prevent delays with reporting and processing CHOWs. Failure to timely report a CHOW, including changes in individuals or organizations with 5% or greater ownership or controlling interests, may result in termination of a provider’s Medicare provider agreement and revocation of Medicare billing privileges.⁷  In addition, delays in reporting CHOWs can result in the provider having to hold Medicare claims from the effective date of the CHOW until Medicare has processed and approved the CHOW.

For more information, please contact Hedy S. Rubinger, Jessica T. Grozine, or Charmaine A. Mech.

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The Arnall Golden Gregory Change of Ownership (CHOW) team leads all regulatory aspects of healthcare transactions for investors, operators, managers, capital partners, and developers of every size in all 50 states.  The team streamlines the regulatory process so that clients close their transactions on or ahead of schedule. Whether obtaining licensure and Medicare/Medicaid approvals, structuring transactions to expedite closings, anticipating issues to minimize cash flow disruption, negotiating regulatory terms in deal documents, creatively resolving diligence issues, or advising on CHOW guidelines and compliance, the team provides extensive experience and practical solutions. To date, the CHOW team has served as primary regulatory counsel in transactions valued at more than $25 billion.​

[1] 42 C.F.R. § 424.516.

[2] 42 C.F.R. § 421.404(b).

[3] See CMS, Who are the MACs, https://www.cms.gov/Medicare/Medicare-Contracting/Medicare-Administrative-Contractors/Who-are-the-MACs.

[4] 42 C.F.R. § 421.404(a).

[5] 42 C.F.R. § 421.404(b).

[6] Id.

[7] 42 C.F.R. 424.516.