Change of Ownership (CHOW) in Medicaid: What Counts and What NEMT Owners Must Do

What a change of ownership means in Medicaid

A change of ownership, or CHOW, is a change in who owns or controls a company enrolled as a Medicaid provider. Your enrollment belongs to your legal company, not to your vans or your phone number. When the people behind that company change, Medicaid wants to know who they are before it keeps paying.

Federal rules set the floor for every state. Under 42 CFR 455.101, a person with an ownership or control interest is anyone who:

• Owns 5 percent or more of the company, directly, indirectly, or both combined
• Holds 5 percent or more of a mortgage, note, or other debt secured by the company, when that stake equals at least 5 percent of its assets
• Is an officer or director of a corporation
• Is a partner in a partnership

Managing employees count too. A general manager, administrator, or anyone else who runs the day-to-day operation must be disclosed, whether or not they are on your W-2 payroll.

These rules reach you even if every trip comes from a health plan or its broker. States must screen and enroll every network provider of a Medicaid managed care plan under the same federal rules (42 CFR 438.602(b)). See the Medicaid provider agreement for what your enrollment commits you to.

Which changes count as a CHOW

States write their own definitions, so one deal can be a CHOW in one state and a simple update in another. These are the common cases:

• One company buys another. Illinois treats one transportation company buying another as a buy-out. The buyer enrolls in IMPACT with a new NPI and provider number, effective the purchase date.
• Sale of shares or LLC units. Indiana counts any change in direct or indirect ownership or controlling interest. California says a transfer of corporate stock is not a change of ownership under its definition, but it may be a change in ownership or control interest that must be disclosed within 35 days.
• A big cumulative change. California requires a new application once the people with an ownership or control interest have changed by a cumulative 50 percent or more since your last approved application, or when 50 percent or more of the corporation’s assets at a location are sold or transferred.
• Merger or reorganization. Indiana counts both. California counts a merger into another corporation, or a consolidation that creates a new one.
• A partner joins or leaves. California counts adding, removing, or replacing a partner.
• A new federal tax ID. Indiana counts a new tax ID as a CHOW, and every CHOW there needs a new enrollment application for each service location. Washington ends your provider agreement on the date of the new tax ID, and Illinois says a change that needs a new tax ID ends the old enrollment.
• A new officer, director, or manager. Not a sale, but still a change to report: within 30 calendar days in Texas and 7 calendar days in Washington.

The tax ID question often decides the Medicaid one. Under IRS guidance (page updated July 21, 2026), a corporation needs a new EIN when it gets a new charter, becomes a subsidiary, or merges to create a new corporation, but not when it is the surviving corporation. A partnership keeps its EIN through an ownership change that does not end the partnership. An LLC needs a new one if it ends and a new corporation or partnership takes its place.

Deadlines and who to tell

The federal rule, 42 CFR 455.104, requires disclosure within 35 days after any change in ownership. Federal matching funds are not available for payments to a provider that fails to disclose. Under 42 CFR 455.416, the state must end your enrollment if a 5 percent owner does not give timely, accurate information and cooperate with screening.

States add their own clocks. Washington wants written notice within 7 calendar days (WAC 182-502-0018). Texas wants the new owner’s enrollment application within 30 calendar days, with a signed contract of sale that names who is liable for overpayments on earlier dates of service (Texas manual, September 2026). Florida wants the seller’s notice and the buyer’s enrollment application at least 60 days before the sale, and if you skip it, seller and buyer are jointly liable for everything owed to Medicaid (2026 Florida Statutes, 409.907). See how to report changes to Medicaid for more states and their portals, and your state guide for your enrollment office.

A new application can bring the federal application fee, which is $750 for calendar year 2026 (CMS notice, December 3, 2025). New York’s transportation enrollment checklist (May 2026) lists that fee and asks for proof of the change, such as a bill of sale or stock purchase agreement.

Then tell everyone else who holds your record:

• Each broker and health plan. MTM Health’s standard agreement, in the January 1, 2023 version Pennsylvania posts, says a change of ownership, FEIN, or legal name requires a new agreement (section 2.C). It wants changes in owners, officers, or controlling interest reported immediately (11.B), and bars assignment without its written consent (12.A). Mercy Care in Arizona (manual updated July 2026) wants written notice 90 days before the change is executed, with the new owner’s TIN, NPI, and AHCCCS ID, a W-9, and papers showing any financial liabilities between buyer and seller. AHCCCS, the state Medicaid agency, must be told separately.
• NPPES. Report changes to your NPI record within 30 days (45 CFR 162.410).
• The IRS, if the deal needs a new EIN.

Check for a freeze before you sign. Indiana’s moratorium on 1915(c) waiver providers, in effect from August 1, 2026 for an initial six months, covers waiver Transportation and blocks changes of ownership for the services it covers (bulletin BT2026124). See enrollment moratoriums. Screen each new owner against the OIG exclusion list too. The state checks owners and managing employees against federal exclusion databases (42 CFR 455.436), and it must deny or end enrollment when a 5 percent owner was convicted of a crime tied to Medicare, Medicaid, or CHIP in the last 10 years, unless it documents a reason not to.

How a CHOW plays out on a claim

The billing split is where a sale goes wrong. Here is a hypothetical buy-out under the Illinois handbook (March 11, 2024): another transportation company buys yours, and the sale closes on the 1st of the month.

1. Your company bills its own rides. It bills dates of service up to its enrollment end date and nothing after. Illinois will not pay the sold company for later dates.
2. The buyer bills from its own number. It enrolls in IMPACT with its own NPI, effective the purchase date, and cannot bill with your NPI.
3. Open approvals move to the buyer. Every prior authorization under your number that runs past the sale date must be changed, and new trips need new approvals. Illinois allows 90 calendar days from the buyer’s enrollment to request revisions, and 180 calendar days from those approvals to submit claims.
4. Nobody signs claims over. Under 42 CFR 447.10, Medicaid pays the provider that gave the ride, with narrow exceptions, so it will not pay the buyer for your unpaid claims even if the sale contract assigns them. Your company collects them, and the contract can say how you settle up.

Texas follows the same pattern with its own deadlines. There, a newly enrolled provider bills dates of service on or after its effective date, within 95 days of the date enrollment is complete and 365 days of the ride. Texas also warns that once a new NPI is processed, the original NPI can be deactivated, which ends online remittance reports, eligibility checks, and claim status for it. Download what you need first.

California has one exception to the rule that a provider number stays with its owner. The seller and buyer sign a successor liability agreement (DHS 6217) and send it within 5 days of the change, the buyer files a complete application within 35 days, and both accept joint and several liability for the location’s Medi-Cal debts. Only then may a new owner use the seller’s provider number. Once the buyer’s own enrollment is approved, the seller’s number is turned off as of the date on the approval notice. If the buyer is denied for not meeting the enrollment criteria, the seller’s number is turned off back to the date of the change, and both owe Medi-Cal for everything it paid after that date.

A stock sale can work differently, because the company stays the same legal entity. California treats a transfer of stock as a disclosure, not a new enrollment, until the cumulative change reaches 50 percent. Indiana counts any change in direct or indirect ownership as a CHOW that needs a new application. Illinois writes its buy-out rule for one transportation company buying another, and ends an enrollment when the change needs a new tax ID. So ask your state’s provider enrollment office how it treats your deal before you sign, and remember that a company bought whole keeps its own history, including any old overpayments. The guide to selling a NEMT business compares the two deal types, and the guide to buying one covers the buyer’s side.