Nursing Homes: Change of Ownership Application Process

Forms

• Application for Nursing Home License, F-62019 (Word).
• Authorization to Accept Personal Services and to Receive Registered and Certified Mail, F-62308 (Word). The person named should be located on-site, at the nursing home.
• Projected Cash Flow Statement and Projected Balance Sheet, F-01022a-e (Excel). Complete all five sheets in this spreadsheet. According to Wis. Admin. Code § DHS 132.14(3)(c), state law requires that a new licensee submit evidence that it has the resources to operate the nursing home for six months. DHS will decide based on the figures provided on the projected cash flow statement and projected balance sheet. Other evidence showing sufficient resources to cover operating losses may be considered. Examples include letters of credit or personal financial statements, with a signed affidavit committing resources.
• DHS Background Check Request, F-03329. A background check must be completed for all individuals identified in the application under Section V, questions 1-3 with “direct” interest. A new background check is required for all applicable individuals as part of the application process.

Other items to include

• A cover letter that includes:
  • A detailed description of the proposed transfer.
  • The names of the individuals who requested a background check.
• The processing fee. This fee equals $6 per licensed bed. For example, if the nursing home has 100 beds, the fee would be 100 beds x $6 = $600. Make the check payable to the Wisconsin Department of Health Services. (This fee will not be used to cover any required annual fee that is due on or before October 1.) The processing fee is nonrefundable. Include a copy of the cover letter along with the processing fee.
• Copy of articles of incorporation and bylaws, or articles of organization and the operating agreement for limited liability companies (LLCs) or partnership agreement (if applicable).
• A final copy of the signed legal document (such as the closing statement, purchase agreement, or lease agreement) at the time of the actual transfer. Submit a draft before the actual transfer.
• Written notification of transfer from the transferor pursuant to Wis. Stat. § 50.03(13)(b), of the anticipated change of ownership. We must receive this notification at least 30 days before the final transfer.

• If the applicant is a foreign corporation: A copy of a certificate of authority to transact business in Wisconsin. Foreign nonprofits only must provide a copy of their Articles of Incorporation and bylaws. General partnerships are not required to file certificates of authority.

  If the applicant is a domestic corporation or a foreign or domestic limited liability company: A copy of a certificate of status.

  Learn more about Wisconsin Department of Financial Institutions requirements for Business Entity General Information, including information about Foreign Entities.

• An organizational chart identifying the parent company and any subsidiaries, related parties, and LLCs and LLPs involved with the applicant and its members (if applicable). If the applicant is an LLC or LLP, provide the names and addresses of all LLCs, LLPs, or any other type of entity of which any of the applicant members are also members, officers, directors, and/or board members.
• A copy of the management agreement or contract if the new owner will be contracting services with a management company. State what other facilities the management company has owned, operated, or managed within the past five years. Note: Regardless of the management contract, the licensed owner is responsible for regulatory concerns.
• Provide information, such as a resume, to demonstrate that any person having the authority to directly manage the operation of the facility has the education, training, or experience to operate and manage a health care facility to provide for the health, safety, and welfare of its residents in substantial compliance with state and federal requirements.
• Include resumes for each officer (if the applicant is a corporation), partner (if partnership), or member (if limited liability company), etc. to assist the department in determining the applicant’s ability to operate a long-term care facility. If applicable, include resumes for each individual of the management company who will exercise operational or managerial control in the long-term care facility.
• Complete Projected Cash Flow Statement and Projected Balance Sheet, F-01022a-e (Excel).
• Include the following financial information (if applicable):
  • Personal financial statement along with a signed affidavit committing personal resources or a copy of the corporation’s annual report along with a signed affidavit committing corporate resources; or
  • Other financial documentation to support sufficient resources to cover operating losses.
  • Audited financial statement(s) for the most recent fiscal year end. If entity has not received an audit, they should provide the fiscal year end and most recent interim year to date financial statement(s).
  • Most recent bank statement(s) for proposing entity.
  • Provide projected patient days, by month and by type of payer, for the first six months of operation.
  • Provide proof of commitment of mortgages when the purchase of the real estate is involved in the change of ownership.
  • Evidence of commitment of a working capital loan and/or a line of credit from the financial institution providing financing.

If the nursing home is Medicare-certified, the provider agreement will remain in effect. A new provider number won't be issued for changes of owner or operator.

Submit the following forms to BNHRC before the change of ownership application is sent to CMS (Centers for Medicare & Medicaid Services). CMS will review and notify the fiscal intermediary (Medicare administrative contractor) with a "tie-in" notice. This notice will change the ownership information to the new owners.

• Skilled Nursing Facility and Intermediate Care Facility Application Form, CMS-671 (PDF)
• Health Insurance Benefit Agreement, CMS-1561 (PDF)
• A copy of the Transfer Agreement between Hospital and Nursing Home. The new owner must submit a new hospital transfer agreement before the license is issued.
• Office for Civil Rights - Online Submission

Submit the following form directly to the fiscal intermediary for their review:

• The Medicare Health Care Provider Enrollment Application, CMS-855A (PDF). This form is used to collect information that must be verified to ensure that the new owner is qualified and eligible to participate in the Medicare program. Complete the form and return it directly to the fiscal intermediary (Medicare contractor). Note: BNHRC does not need a copy of the completed form. When the fiscal intermediary has completed their review, they will send DHS a copy of the approved form.

The new owner may refuse to accept the previous owner's provider agreement. The provider agreement then will be terminated effective with the change of ownership date. The new owner needs to refuse the assignment in writing. Forward the refusal to:

This request must be made 45 days before the change of ownership. This will allow for the orderly transfer of any Medicare beneficiaries. If the new owner wants to take part in the Medicare program, the new owner must apply for certification. This request will be treated as a new application to the Medicare program. An initial survey for Medicare certification will need to be completed.

If the nursing home is a skilled care facility participating in Medicare, but the applicant wishes to stop participating, written notice must be provided to DQA.

According to 42 CFR 489.52:

• (2) The notice should state the intended date of termination, which must be the first day of a month.
• (b) Termination date. (1) CMS may set a date not more than 6 months from the date on the provider's notice of intent.
• (2) CMS may accept a termination date that is less than 6 months after the date on the provider's notice if it decides that this won't unduly disrupt services or administration of the Medicare program.
• (3) A cessation of business is effective with the date on which the provider stopped providing services to the community.
• (c) Public notice. (1) The provider must give notice to the public at least 15 days before the effective date of termination.
• (2) The notice must be published in one or more local newspapers. It must specify the termination date and explain to what extent services may continue after that date. Exceptions are set forth in s489.55.

If a skilled care facility isn't certified in the Title 18 (Medicare) program but wishes to take part, send a written request for Medicare certification to:

New medical assistance provider agreements and an application will be sent to the new licensee. These must be completed and signed before a new medical assistance provider number can be assigned. DHS reserves the right to decide whether and when a change of ownership has occurred to calculate Title 19 daily accommodation rates. Once ownership has been transferred and a new license issued, the new owner won't be allowed to bill the Wisconsin Medical Assistance Program using the previous operator's provider number.

If the nursing home has Title 19 Medicaid certification, go to the ForwardHealth portal for the Medicaid application. If you need help with the application, call ForwardHealth Provider Services at 800-947-9627.

If the nursing home is Medicaid-certified only, complete and submit this form to BNHRC:

• Skilled Nursing Facility and Intermediate Care Facility Application Form, CMS-671 (PDF)

Note: A nursing home provider that sells or transfers their business may have to repay DHS for any incorrect payments. Pursuant to Wis. Stat. §. 49.45(21), the person or persons to whom a "transfer of ownership" is made will be held liable by DHS for repayment. Before the final transfer of ownership, the new owner is responsible for contacting DHS to find out if the previous owner owes repayment. The inquiry should be made in writing at least 20 days before the transfer. It should include:

• Name and address of transferee (new owner) and transferor (previous owner).
• Nursing home name and provider number.

The Wisconsin Medical Assistance Program may enforce these terms within four years after transfer of a business or business assets.