What is a Medicaid change of ownership (CHOW) for a NEMT company?
A change of ownership, or CHOW, is any shift in who owns or controls a Medicaid-enrolled provider, from an outright sale to a new 5 percent partner. Federal rules want updated ownership disclosures within 35 days. States and brokers often ask for more: Indiana and Texas take a new enrollment application, and MTM requires a new provider agreement.
On this page
What counts as a change of ownership
A CHOW is broader than a sale. Indiana’s provider enrollment module lists any change in direct or indirect ownership or controlling interest, a merger, a corporate reorganization, a change in the owner or doing-business-as name, and a change in federal tax ID. Selling half the company to a partner, folding it into a holding company, or selling the vans and contracts to another firm can all qualify.
The federal floor is the ownership disclosure. Under 42 CFR 455.104, a provider files updated ownership disclosures within 35 days after any change in ownership. That covers anyone crossing the 5 percent line, directly or through another company, along with new officers, directors, partners, and managing employees.
How the deal is structured decides the rest. In an asset sale the buyer is a different legal entity with its own tax ID, so it usually needs its own enrollment. In a sale of the shares or membership interests, the company and its tax ID stay the same, but the new owners still have to be reported, and some states still call it a CHOW. The guide to buying a NEMT company weighs the two structures.
New enrollment or a transfer
| Program | What a change of ownership requires |
|---|---|
| Federal rule | Updated ownership and control disclosures within 35 days |
| Indiana Medicaid | A fresh enrollment application from every service location, filed with a W-9 and the purchase agreement or bill of sale. Only extended care facilities take over the seller’s enrollment and Provider ID. |
| Texas Medicaid | A new enrollment application to TMHP within 30 calendar days, plus the signed sale contract, which must say whether buyer or seller answers for overpayments found later on dates of service before the change |
| MTM standard agreement | Immediate notice of ownership changes. New owners, a new federal tax ID, or a new legal name mean a new agreement. |
Plan for a gap in cash. Texas gives a newly enrolled provider 95 days, counted from the day enrollment is finished, to send its claims, and no claim may be older than 365 days from the ride. A new broker agreement usually means credentialing again, and MTM lets no driver or attendant work its trips until fully credentialed.
Moratoria can block the deal
A temporary enrollment moratorium under 42 CFR 455.470 can stop a CHOW outright. Indiana’s moratorium on 1915(c) waiver services took effect August 1, 2026, runs six months to start, and names Transportation among the services it covers. It blocks changes of ownership for existing waiver agencies offering those services. It applies to 1915(c) waiver providers, so it reaches waiver transportation rather than regular Medicaid rides. Minnesota’s enrollment freeze for NEMT providers based in the seven-county metro area runs until January 27, 2027, which matters whenever the buyer would need an enrollment of its own. Check for an active moratorium before signing a letter of intent.
Broker consent and receivables
A broker contract does not simply follow the company to its new owner. MTM’s standard agreement, for one, bars assigning, subletting, or transferring any part of it without MTM’s written consent. If the seller hands its right to MTM payments to someone else, MTM wants written notice 30 or more calendar days ahead of the first payment affected. Build those consents into the closing conditions. The guide to selling a NEMT company covers the same notices from the seller’s side.
Medicaid receivables follow federal payment rules. 42 CFR 447.10 lets the state pay only the provider, with narrow exceptions such as a billing agent paid by processing cost rather than a share of collections. It also bars payment to a factor, meaning anyone who advances money against receivables the provider has sold or assigned to it. In an asset sale, trips run before closing are billed under the seller’s enrollment and paid to the seller, and the purchase agreement settles who keeps the money.
Drawing the line at the closing date
Every CHOW filing and receivables split turns on the closing date. HealthRide’s payer report totals rides by payer, and the trip log export lists each ride with its date, GPS-recorded miles, timestamps, and signatures, so the rides on each side of the closing date are easy to separate.
Frequently asked questions
- Does bringing in a partner with 10 percent count as a change of ownership?
- For federal purposes, a new owner at 5 percent or more has to appear on an updated disclosure within 35 days. Some states go further. Indiana treats any change in direct or indirect ownership or controlling interest as a CHOW, and each service location then files its own new enrollment application. Read your state's provider manual before the partner signs.
- Can the buyer keep billing under the seller's Medicaid number?
- Usually not. In Indiana, only extended care facilities such as nursing homes take over the seller's enrollment and Provider ID. Every other provider, a transportation company included, files a new enrollment application for each service location. In Texas, a change that brings a new NPI can deactivate the old one, ending online remittance downloads and claim status checks for it. Broker contracts follow the same pattern: MTM requires a new agreement.
- Should the broker hear about the sale before or after closing?
- Before. MTM's standard agreement bars assigning any part of the contract without MTM's written consent, requires immediate notice of ownership changes, and needs a new agreement once ownership changes. Lining that up before closing keeps the new company from losing trips while the paperwork catches up.
- Who gets paid for trips run before closing?
- The company that ran them. Under 42 CFR 447.10, the state pays Medicaid claims to the provider itself, apart from a few listed exceptions, and it may not pay a factor that bought the receivables. The purchase agreement then decides how that cash is split between buyer and seller.
