Texas Revises Change of Ownership (CHOW) Requirements for Certain Healthcare Provider Types

The Texas Health and Human Services Commission, on behalf of the Department of Aging and Disability Services (DADS), has adopted revised regulations that impact the Change of Ownership (CHOW) process and requirements for multiple provider types, including nursing facilities, assisted living facilities, home health agencies, and hospice providers, among others. The revised regulations will go into effect on October 6, 2017. The changes include a modification to the key definition of a CHOW, which will eliminate the requirement for regulatory review for indirect changes of ownership, as discussed further below. The revised regulations will streamline the regulatory review process for changes in ownership interests and eliminate many on-site CHOW-related surveys for nursing facilities, assisted living facilities, and several other provider types.

The revised definition of a CHOW is limited to changes that result in a new federal taxpayer identification number for the licensee. The revised CHOW definition further clarifies that a change in personal representative for a deceased licensee is not a CHOW for Texas licensure purposes. The revised regulations also allow DADS, at the agency’s discretion, to conduct a desk review in lieu of an on-site health inspection following the issuance of a CHOW license if less than 50 percent of the direct or indirect ownership of the licensee has changed or if every disclosable owner in the new licensee had a disclosable interest in the former licensee. For institutional providers, DADS retains sole discretion to conduct on-site Life Safety Code inspections prior to issuing a CHOW license. For a change in ownership interest that is not considered a CHOW under the revised definition, providers will are still required to notify DADS no later than 30 days after the change occurs. These changes are expected to provide a more streamlined regulatory process when indirect ownership changes take place.